Sky/Fox Update — House of Commons, 2018-01-23
Topic: Domestic Commerce
Matthew John David Hancock (Conservative, Centre-right): I am here in my capacity as the quasi-judicial decision maker on the proposed merger between 21st Century Fox and Sky to update the House on the interim report issued today by the Competition and Markets Authority The decision-making role is one that my right hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) discharged, having met her commitment, which was given many times in this House, to the greatest possible transparency and openness allowed by the process. Although I come fresh to this, I intend to follow that approach of being as open as possible while respecting the quasi-judicial nature of the decision As the House well knows, after the proposed acquisition was formally notified to the competition authorities last year, my right hon. Friend issued an intervention notice on media public interest grounds, namely of media plurality and the genuine commitment to broadcasting standards. That triggered a phase 1 investigation, requiring Ofcom to report on the specified public interest grounds and the CMA to report on jurisdiction Having received advice from Ofcom and the CMA, in September 2017, my right hon. Friend referred the proposed Sky/Fox merger to the CMA for a phase 2 investigation on both grounds. The original statutory deadline for the final report was 6 March 2018, but the CMA has today confirmed that it will be extended by a further eight weeks and that the revised deadline is 1 May Once I have received the final report, I must come to a decision on whether the merger operates or may be expected to operate against the public interest, taking into account the specified public interest considerations of media plurality and genuine commitment to broadcasting standards. Following receipt of the final report, I will have 30 working days to publish my decision on the merger, so if I receive the CMA’s report on 1 May, I will have until 14 June to publish my decision To be clear, the publication today is of the CMA’s provisional findings. I have placed a copy in the Library. On the need for genuine commitment to broadcasting standards, the CMA provisionally finds that the merger is not expected to operate against the public interest. On media plurality grounds, the CMA’s provisional finding is that the merger may be against the public interest. It cites concerns that the transaction could reduce the independence of Sky News and would reduce the diversity of viewpoints available to, and consumed by, the public. It also raises concerns that the Murdoch family trust would have increased influence over public opinion and the political agenda The CMA has identified three remedy approaches and seeks views from interested parties on them. The remedy approaches are: first, to prohibit the transaction; secondly, to undertake structural remedies—to recommend either the spin-off of Sky News into a new company, or the divestiture of Sky News—and thirdly, behavioural remedies, which could include, for example, enhanced requirements relating to the editorial independence of Sky News. The CMA recognises that the proposed acquisition of Fox by Disney could address concerns set out in the provisional findings. However, the uncertainty about whether, when or how that transaction will complete means that the CMA has also set out potential approaches that include introducing remedies that would fall away subject to the Disney-Fox transaction completing. The CMA has invited written representations on the provisional report’s findings, and the potential remedy approaches, with 21st Century Fox, Sky and other interested parties, before producing a final report As such, and given the quasi-judicial nature of the process, I hope that the House will understand that I cannot comment substantively on the provisional report and must wait for the final report before commenting. However, I am aware of the keen interest across the House in this important matter, and I know that Members will be closely scrutinising the CMA’s provisional findings and will have views on them. The CMA’s investigation will continue in the coming weeks. It has set out the process for making representations on the remedy options outlined, and on the provisional findings, with deadlines of 6 and 13 February respectively. I am sure that today’s debate will provide helpful context for that work What I am able to confirm today is that I will undertake to keep the House fully informed and to follow the right and proper process, considering all the evidence carefully when the time comes to make my decision on receipt of the CMA’s final report. I commend this statement to the House.