Secretary of State announces decision and publishes CMA final report on Fox’s proposed acquisition of Sky

06 Jun 2018 | by Monckton Chambers

On 5 June 2018, the Secretary of State for Digital, Culture, Media and Sport published the final report of the Competition and Markets Authority (CMA) and announced his decision on the proposed acquisition by Fox of the remaining shares in Sky plc.

The CMA’s final report confirms its provisional finding that the transaction is not in the public interest due to media plurality concerns. The CMA concluded that the transaction may be expected to result in insufficient plurality of persons with control of media enterprises in the UK because it would lead to the Murdoch Family Trust (MFT), which owns 39% of Fox and News Corp, holding too great a degree of control over the diversity of viewpoints consumed by audiences in the UK, and would give the MFT too much influence over public opinion and the political agenda. The CMA also confirmed its provisional finding that there are no public interest concerns arising from lack of a genuine commitment to meeting broadcasting standards in the UK.

The CMA concluded that only prohibition or the divestiture of Sky News would provide an effective solution to the identified adverse public interest effects. Of these two options, the CMA recommended that the most effective and proportionate remedy would be the divestiture of Sky News to Disney or to another suitable upfront purchaser.

The Secretary of State has accepted the CMA’s findings and recommendations. Fox has written to the Secretary of State to offer undertakings on effectively the same terms as set out by the CMA in its final report. The Secretary of State has asked DCMS officials to begin immediate discussions with the parties to finalise the details of the undertakings with a view to agreeing an acceptable form of the remedy. The Secretary of State will then consult on the proposed undertakings.

Kassie Smith QC, Alistair Lindsay and Julian Gregory are advising the Secretary of State.

Rob Williams is advising the CMA. Conor McCarthy is also advising the CMA with their investigation.

George Peretz QC and Azeem Suterwalla are advising an interested party Avaaz.