UK competition authority opposes Fox takeover of Sky on media plurality concerns

The UK's Competition and Markets Authority has opposed 21st Century Fox's proposed bid to acquire all of pay-TV provider Sky on concerns it would give the Murdoch family too large a voice in the UK news media. However, if Disney's takeover of much of Fox goes ahead, the concerns over media plurality would fall away, the regulator said. 

The CMA was asked by the UK Culture Secretary to evaluate the potential impact of Fox's bid on media plurality and broadcasting standards. In terms of the former, the regulator said the takeover would not be in the public interest, given the Murdoch family's other holdings in newspapers, radio and online news. The communications regulator Ofcom came to a similar conclusion earlier. 

The regulator estimate's that Murdoch's news outlets are "watched, read or heard by nearly a third of the UK’s population, and have a combined share of the public’s news consumption that is significantly greater than all other news providers, except the BBC and ITN". The other news outlets on the market would not be enough to offset the combined influence of Murdoch's News Corp and Sky News.

In terms of broadcasting standards, the CMA found that Fox, Sky and the Murdoch family's trust have a "genuine commitment to broadcasting standards in the UK". The News Corp newspapers had improve their compliance with standards since the phone-tapping scandal in 2012, the CMA found. That scandal had helped bring an end to Fox's previous attempt to acquire Sky. The regulator also did not find problems at Fox's US news activities, such as "serious" allegations of sexual harassment, had an impact on the operations in the UK. As a result, Fox taking full control of Sky is not likely to operate against the public interest in this sense, the regulator said. 

Nevertheless, the media plurality concerns bring a halt to the deal unless remedies can be found, or the deal is dropped in light of the larger Disney transaction announced in while the CMA's inquiry was ongoing. The CMA started a public consultation on its preliminary decision and a number of proposed remedies. These include the company selling the broadcaster Sky News or setting up a structure to "insulate Sky News from the [Murdochs'] influence", CMA said. 

After the consultation, the CMA will present its final report to the Culture Secretary by 01 May, and the Secretary will then have the final decision on the Fox-Sky deal.