Fox’s proposed $15 billion takeover of Sky has suffered a set-back after the UK’s competition watchdog ruled it was not in the public interest because it would hand Rupert Murdoch too much power over the UK’s news market.
Announced in December 2016, the deal would see 21st Century Fox buy the 61% of Sky it doesn’t already own. A previous take-over attempt failed in the wake of the phone hacking scandal that led to the closure of The News of the World.
The proposed tie-up is deeply controversial with many UK opposition politicians and media campaigners who claim it would give Mr Murdoch too much control over the UK’s news and media landscape, a concern backed by the CMA today due to the Murdoch family’s newspaper holdings.
The watchdog said that while it had no concerns about the “commitment to meeting broadcasting standards in the UK,” the take-over “is not in the public interest due to media plurality concerns.”
“The media plurality concerns identified mean that, overall, the CMA provisionally concludes that the proposed transaction is not in the public interest.”
Anne Lambert, Chair of the independent investigation Group, said: “Media plurality goes to the heart of our democratic process. It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.
“We have provisionally found that if the Fox/Sky merger went ahead as proposed, it would be against the public interest.
“It would result in the Murdoch family having too much control over news providers in the UK, and too much influence over public opinion and the political agenda.”
Since renewing plans to take over Sky, Fox has announced plans to sell its TV and film assets, including its current and any future stake in Sky, to Disney.
While the CMA says concerns about media plurality “would fall away if the Disney/Fox transaction went ahead as announced” it notes that it is currently “uncertain whether, when or how the transaction will be completed.”
The CMA has set out a number of possible remedies which it says could address its concerns about media purity in a combined Fox/Sky entity, including the sale of Sky News and guaranteed support for it.
It will consider responses to these remedies before making a final recommendation to the Secretary of State for Digital, Culture, Media and Sport which is due by May.