CMA provisionally finds Fox/Sky deal not in the public interest

25 Jan 2018 | by Monckton Chambers

On 23 January 2018, the CMA published its provisional decision that Fox taking full control of Sky is not in the public interest due to media plurality concerns, but not because of a lack of a genuine commitment to meeting broadcasting standards in the UK.  The media plurality concerns identified mean that, overall, the CMA provisionally concluded that the proposed transaction is not in the public interest.  The public interest issues had been referred to the CMA by the Secretary of State for Digital, Culture, Media and Sport.  The CMA’s final view is due in summer 2018, when the matter will be referred back to the Secretary of State for a final decision on the merger.

The CMA provisionally found that if the deal went ahead, as currently proposed, it would be likely to operate against the public interest. It would lead to the Murdoch Family Trust (MFT), which controls Fox and News Corporation (News Corp), increasing its control over Sky, so that it would have too much control over news providers in the UK across all media platforms (TV, Radio, Online and Newspapers), and therefore too much influence over public opinion and the political agenda.  The MFT’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.  Due to its control of News Corp, the Murdoch family already has significant influence over public opinion and full ownership of Sky by Fox would strengthen this even further.  While there are a range of other news outlets serving UK audiences, the CMA provisionally found that they would not be sufficient to moderate or mitigate the increased influence of the MFT if the deal went ahead.

The CMA’s investigation also examined a range of evidence to understand whether Fox, Sky and the MFT have a genuine commitment to broadcasting standards in the UK. Here, it provisionally found that Fox taking full control of Sky was not likely to operate against the public interest.

Kassie Smith QC and Julian Gregory are acting for the Secretary of State in this matter.

George Peretz QC and Azeem Suterwalla are acting for Avaaz, who are objecting to the transaction.

This has been widely covered by the press: BBC, The Guardian, The Independent, The Times.