Regulator warning on Sky takeover

The proposed £11.7 billion takeover of Sky by 21st Century Fox is not in the public interest as the combined group would have too much control over UK news media, the competition watchdog has provisionally found.

The Competition and Markets Authority (CMA) said if Rupert Murdoch-owned Fox’s plan to take full control of Sky went ahead, it was “likely to operate against the public interest”.

While it found there was not a lack of a genuine commitment to meeting broadcasting standards in the UK, its concerns over the impact on media plurality meant that overall it believed the deal was not in the public interest.

The CMA has put forward three ways it believes its concerns could be addressed – blocking the deal, spinning off Sky News, or “behavioural” changes to protect Sky News from direct influence from the Murdoch Family Trust.

Its findings come as Sky is set for a new owner, after Walt Disney agreed a £39bn deal to buy Fox’s entertainment assets.

Anne Lambert, chairwoman of the CMA’s 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.”

Fox said it was “disappointed” at the provisional ruling.

The company said it will continue to engage with the CMA ahead of the publication of its final report, which has now been put back to May 1.

It added it still expects regulatory approval of the deal by June 30.

Sky said it “noted” the CMA’s initial findings and that the regulator is seeking submissions on possible remedies regarding its plurality concerns.

The CMA said it took into consideration the impending Walt Disney deal and the fact this would “significantly weaken” the link between Sky News and the Murdoch Family Trust.

But it added: “We cannot be sufficiently confident at this stage whether, when, or how the Disney/Fox transaction will complete.”

The Competition and Markets authority said the tie-up would likely be “against the public interest”.