Commission clears 21st Century Fox’s proposed acquisition of Sky, but there are still hurdles ahead

The European Commission has given its unconditional approval to the proposed acquisition of Sky by Twenty-First Century Fox. The Commission concluded the transaction would raise no competition concerns in Europe. However, this may not be the end of the saga.

Australian mogul Rupert Murdoch is already the owner of the deeply eurosceptic Sun and Times newspapers in the UK, and was also the owner of the News of the World. Twenty-First Century Fox also owns the deeply partisan Fox News which supports President Donald Trump.

Murdoch’s opposition to the EU is well publicized. He was once asked by journalist Anthony Hilton, why he was so opposed to the European Union, Murdoch replied: “That’s easy, when I go into Downing Street they do what I say; when I go to Brussels they take no notice.”

UK media plurality review and Article 21 of the EU Merger Regulation

The Commission has exclusive jurisdiction to assess the impact of the proposed transaction on competition. However, Article 21 of the EU Merger Regulation recognizes that member states may take appropriate measures, including prohibiting proposed transactions, to protect other legitimate interests, such as media plurality.

The purpose of, and legal frameworks for, competition assessments and media plurality assessments are very different. The competition rules focus broadly on whether consumers would be faced with higher prices or reduced innovation as a result of a transaction. A media plurality assessment typically looks at wider concerns about whether the number, range and variety of persons with control of media enterprises is sufficiently diverse.

The UK Secretary of State for Culture, Media and Sport Karen Bradley issued a European intervention notice on 16 March 2017. This notice requires the relevant UK body (Ofcom) to investigate and report by 16 May 2017 on whether the proposed transaction is, or may be, against the public interest.

The Commission’s findings are distinct and without prejudice to the UK’s ongoing media plurality review of the proposed transaction.

Murdoch

Murdoch’s influence over the British press and politics has long been a subject of controversy. Margaret Thatcher waived through News Internationals purchase of The Times and The Sunday Times in 1981. Thatcher’s motivation was simple, both shared radical right-wing views and she knew that she could continue to count on his backing. In 1992, The Sun claimed that ‘It was The Sun what won it’ when John Major beat Neil Kinnock.

Winning the support of Murdoch since these times has been a sine qua non of getting into government in the UK. Tony Blair courted Murdoch’s support in 1997, Blair even became a godfather of one of Murdoch’s daughters. It is alleged that Blair edged former MEP Carole Tongue out of the European Parliament at Murdoch’s request because of her support for public-service broadcasting and her criticism of Murdoch’s influence on British journalism, while on the Parliament’s culture committee.

More recently, the Leveson inquiry into the culture, practices and ethics of the British press following the News International phone hacking scandal found that the UK was in need of an independent body to deal with press misconduct, Prime Minister David Cameron chose not to act on this recommendation. The long-awaited second part of the inquiry that will look specifically at the misconduct of Murdoch-owned News International has not yet started – it remains to be seen if Theresa May has the will to continue the inquiry that will look into the links between News International and and police officers who received payments or were otherwise complicit with the news outlet.

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