Hunt to refer BSkyB bid to Competition Commission, maybe…
Culture secretary Jeremy Hunt said that he intends to refer News Corporation’s BSkyB takeover bid to the Competition Commission.
However, he plans to delay his referral until he has considered undertakings from the Rupert Murdoch-owned company, “which it contends could sufficiently alleviate the concerns I have such that I should accept the undertakings instead of making a reference,” Hunt said today.
It is understood that News Corp’s undertakings refer to Sky News. On 20 January, News Corp said it might be prepared to sell Sky News in a bid to avoid a full review.
“If this process produces undertakings in lieu which I believe will prevent or otherwise mitigate the merger from having effects adverse to the public interest, and which I propose to accept, I will then publish the undertakings in lieu and (as required under the Act) begin a formal 15 day consultation period during which time all interested parties will be able to express their views,” the culture secretary said.
Hunt has not given a time-frame for this process, although reports suggest if he does accept the undertakings, it could happen within the next few weeks. However, if he refers the bid to the Commission, it is likely to take up to six months.
“My main concern is not to work to an arbitrary timetable but to ensure that I reach my decision in a fair and even-handed way which is transparent and ensures that all concerns are properly considered,” Hunt said.
The culture secretary plans to consult Ofcom over News Corp’s undertakings and whether they address the potential impact on media plurality.
Ofcom has already recommended a Competition Commission review on the grounds that the buyout could reduce the diversity of news provision in the UK below an acceptable level.
News Corporation claims there are a “number of issues” with Ofcom’s report. “News Corporation has made a submission to the Department of Culture, Media and Sport setting out a number of issues with the Ofcom report. However, in the interests of progressing to a transaction, News Corporation has submitted an undertaking that we believe addresses Ofcom’s concerns. We will continue to engage constructively with the regulatory process,” a statement said.
Hunt met News Corp executives on 6 January to explain the findings of the Ofcom report and his intended action – to refer the bid. However, he said he would accept a response “if they wanted to challenge my thinking”.
There have been a number of meetings between the parties involved since then. “As a result of these meetings and my consideration of the Ofcom report and subsequent submissions from the parties involved I still intend to refer the merger to the Competition Commission. On the evidence available, I consider that it may be the case that the merger may operate against the public interest in media plurality,” Hunt said.
“However, before doing so it is right that I consider any undertakings in lieu offered by any merging party which have the potential to prevent or otherwise mitigate the potential threats to media plurality identified in the Ofcom report.”
Hunt’s statement is timely, released just a day after The Independent revealed that James Murdoch, chairman of News Corporation in Europe and Asia, was also present at Rebekah Brooks’ (chief executive of News International) dinner party, which David Cameron and his wife attended over Christmas. The dinner took place just days after the prime minister passed responsibility for the BSkyB decision to Hunt (following business secretary Vince Cable’s outburst to “declare war” on Murdoch).
It also comes amid the News of the World phone-hacking scandal, which saw the former editor of the News International newspaper Andy Coulson quit his job as Downing Street’s director of communications on Friday.
The culture secretary will be trying to prove that his judgement is independent, despite recent events, though the small print suggests that he could still accept News Corp’s undertakings and push through Murdoch’s takeover plans without a full Competition Commission review. Can you imagine the political row and cries of fix if he does?