Sky/21st Century Fox: Merger — House of Commons, 2017-03-16
Topic: Domestic Commerce
Karen Anne Bradley (Conservative, Centre-right): I came to the House on 6 March to give an update on the proposed merger between 21st Century Fox and Sky. At that time, I said that I was minded to issue a European intervention notice on the basis that I believed there to be public interest considerations, as set out in the Enterprise Act 2002, that may be relevant to this proposed merger and warrant further investigation The grounds on which I was minded to intervene were, as I explained at that time, media plurality and commitment to broadcasting standards, but I also confirmed that, in line with statutory guidance, I would be inviting further representations in writing from the parties. I gave them until last Wednesday to provide those representations Having carefully considered the representations from the parties and the other representations that I have received, I can now tell the House that I have today issued a European intervention notice on the grounds of media plurality and commitment to broadcasting standards. I have written to the parties, Ofcom, and the Competition and Markets Authority to inform them of my decision While the representations from 21st Century Fox highlighted areas in which it contested the position taken in my "minded to" letter, none of the representations have led me to dismiss the concerns I have regarding the two public interest grounds I previously specified. I am of the view that it remains both important, given the issues raised, and wholly appropriate for me to seek comprehensive advice from Ofcom on those public interest considerations, and from the CMA on jurisdiction issues. I note that, overall, the parties have welcomed a thorough regulatory review, and that is what will now happen as a result of the intervention notice I have issued Since my "minded to" decision, I have also received just over 700 representations from third parties, the vast majority of which supported intervention. A number of those representations called for me to create a new public interest consideration, which would require a fit and proper assessment of the parties to the merger to take place as part of the intervention process. They also argued that it should be made clearer that matters of corporate governance, accountability and conduct could be taken into account in assessing this merger. These issues relate to questions about the application of the fit and proper test by Ofcom, and I will come to those issues shortly As I have previously set out, the decision will now trigger action by Ofcom to assess and report to me on the public interest grounds I have specified, and by the CMA to report to me on jurisdiction. They each have 40 working days to prepare and provide these reports. This means that I will expect their reports by Tuesday 16 May. I will then resume my decision-making role in relation to the merger To be clear, this intervening period, and indeed any time after that until a final decision on the merger is taken, is subject to the constraints that apply to my quasi-judicial role. Mr Speaker, I am sure you understand that I cannot—nor can any other member of the Government—comment substantively on the case as it proceeds. I will, however, as I have done so far, keep the House updated once I have considered the reports of Ofcom and the CMA What I will comment on is that much of the discussion in last week’s proceedings here and in the other place focused on Ofcom’s assessment of whether a licensee is fit and proper, including the ongoing duty that falls to Ofcom under the 1990 and 1996 Broadcasting Acts. I have received representations from the hon. Member for West Bromwich East (Mr Watson) and the right hon. Member for Doncaster North (Edward Miliband), as well as from a number of other parties, on adding fit and proper as a new public interest consideration in the Enterprise Act 2002. I want to assure them that I have very carefully considered the arguments they have put forward The grounds set out in the Enterprise Act that allow for intervention in media mergers are aimed at ensuring plurality of the media, which is essential to a healthy democracy—something I know that Members of this House and the other place support. It is a view I fully and unequivocally endorse. However, I am also clear that the question of whether someone is fit and proper to hold a broadcasting licence is a different requirement, and one that, quite rightly, sits with Ofcom, the independent regulator On Monday, Ofcom announced that it would conduct its fit and proper assessment at the same time it considers any public interest test in response to my decision to intervene in the merger. This means that Ofcom will conduct its assessment within the 40 working days it has to report to me on the public interests I have specified in the intervention notice. I welcome Ofcom’s announcement, which will provide not only clarity for the parties, but reassurance to those who have expressed their own concerns, that this is a matter that Ofcom will now consider before the merger takes place I trust, as before, that this update is helpful to right hon. and hon. Members, and that it gives us an opportunity to debate this important issue, while at the same time respecting the limits of what I can say, as I referred to earlier, given my ongoing quasi-judicial role in relation to this merger. I commend the statement to the House.