Advocacy group challenges Fox bid to acquire Sky

Avaaz claims Ofcom’s initial ruling on the deal was ‘fatally flawed’ and demands review

Ofcom ruled that Sky would remain fit to hold a broadcasting license under the control of media billionaire Rupert Murdoch. Photograph: Chris Radburn/PA Wire

Ofcom ruled that Sky would remain fit to hold a broadcasting license under the control of media billionaire Rupert Murdoch. Photograph: Chris Radburn/PA Wire

 

A key opponent of 21st Century Fox’s bid to acquire Sky has initiated a legal challenge to the deal, calling on UK regulators to revisit their ruling that the pay-TV provider would remain fit to hold a broadcasting license under the control of media billionaire Rupert Murdoch.

In a letter to the chief of the UK’s Office of Communications, lawyers acting for political advocacy group Avaaz said Ofcom’s initial ruling was “fatally flawed by material errors of law, fact and reasoning”, and demanded a fresh review of the £11.7 billion (€12.7 billion) plan for Mr Murdoch’s Fox to acquire the 61 per cent of Sky it doesn’t already own.

Ofcom used an irrational legal standard, ignored significant and relevant evidence, made basic factual errors and used Fox executive assurance – despite a long history of false statements by Fox representatives to the regulator – as evidence of likely compliance,” Avaaz said in the letter, which is a precursor to a formal challenge.

Additional scrutiny

Reopening the “fit and proper” debate would subject the Murdochs to additional scrutiny over their handling of recent sexual and racial harassment allegations at Fox News in the US, while potentially handing opponents of the Sky deal more information with which to challenge the transaction. Avaaz is seeking documents related to Fox’s dealings with Ofcom, as well as the regulator’s communications with culture secretary Karen Bradley, who is separately weighing whether to ask for a deeper, six-month probe of the merger on different grounds.

Bradley has said she intends to call for the Competition and Markets Authority to investigate further whether the tie-up would give Murdoch and his family too much control over UK media.

Broadcasting standards

Opponents of the deal are also demanding that she seek a CMA review of Fox’s commitment to broadcasting standards. Ofcom made recommendations to Bradley on those matters, and separately cleared Sky on the fit-and-proper test, which is an ongoing assessment the regulator makes on its own.

“Ofcom’s made mistake after mistake in deciding to give the Murdochs a clean bill of health,” said Bert Wander, campaign director at Avaaz. “It’s time they put these errors right if they’re to have any credibility.”

Avaaz also said it wants minutes of meetings between Ofcom and Fox representatives and/or the Murdoch family trust.

“It appears that Ofcom have relied extensively on what they were told in those meetings,” Avaaz said.

Ofcom said it received the letter and will respond “in due course”. Fox declined to comment.

– (Bloomberg)