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29/06/2017

Ofcom Finds 'Cause For Concerns' Over Proposed Fox Takeover Of Sky

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Ofcom has found that the proposed takeover of Sky by 21st Century Fox raises public interest concerns relating to media plurality, and a risk of increased influence by members of the Murdoch Family Trust over the UK news agenda and the political process.

On 16 March the Secretary of State for Culture, Media and Sport, Karen Breadley, issued a European intervention notice, which asked Ofcom to report on two public interest considerations around the proposed takeover plans.

Specifically, Ofcom was asked to consider whether there would be sufficient plurality of persons with control of the media enterprises; and whether the parties would have genuine commitment to the attainment in relation to broadcasting of standards objectives.

The Ofcom produced report was completed on 20 June, and has been published today, 29 June, by the Secretary of State.

The report finds that the proposed transaction raises public interest concerns relating to media plurality and identifies a risk of increased influence by members of the Murdoch Family Trust over the UK news agenda and the political process, with its unique presence on radio, television, in print and online.

The report states that Ofcom consider that these concerns may justify a reference by the Secretary of State to the Competition and Markets Authority.

In a statement issued by the regulator, Ofcom said: "Ofcom has an ongoing duty to be satisfied that broadcasting licensees are fit and proper holders of a licence. This means that we can assess a licensee at any time, on our own initiative, as well as being able to respond to concerns raised by third parties.

"We announced on 6 March 2017 that we would assess Sky's fitness and properness to hold broadcasting licences in the event of this change of control, and do so within the same timeframe as completing the public interest report.

"Ofcom has considered allegations of sexual and racial harassment at Fox News that are extremely serious and disturbing. It seems clear that there were significant failings of the corporate culture at Fox News. In order to have a concern about fitness and properness, we would need to see evidence of misconduct in the parent company, Fox. However, we have no clear evidence that senior executives at Fox were aware of misconduct before it was escalated to them in July 2016, after which action was taken.

"We have concluded that the overall evidence available to date does not provide a reasonable basis for Ofcom to conclude that, if Sky were 100% owned and controlled by Fox, it would not be a fit and proper holder of broadcast licences. Our assessment finds that Sky would remain a fit and proper licence holder in the event of the merger. As fitness and properness is an ongoing duty, we can re-examine our position if new evidence comes to light."

21st Century Fox and Sky now have until 14 July to respond to the initially findings before the Secretary of State can make any final decision.

In a statement released by the Secretary of State, she said: "While there are strong feelings among both supporters and opponents of this merger, in this quasi judicial process, my decisions can only be influenced by facts, not opinions - and by the quality of evidence, not who shouts the loudest. The invitation to make representations will open today and close on Friday 14 July and can be found on the DCMS website."
(MH)
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