News Corporation‘s proposed take-over of BSkyB is being referred to the Competition Commission, Culture Secretary Jeremy Hunt has confirmed.
The news comes after a day of dramatic developments that began with Hunt announcing he was seeking fresh advice from regulators Ofcom and the Office of Fair Trading, after News Corp‘s decision to close the scandal-hit News of the World.
This was followed by News Corp withdrawing undertakings offered to the Government to avoid a referral – including spinning off Sky News.
Speaking at a heated debate at the House of Commons this afternoon, Hunt said the decision would be immediately referred to the Commission, which would undertake a ‘full and exhaustive’inquiry into the takeover.
A statement was released by News Corp at 3.45pm saying: ‘News Corporation today announces that it is withdrawing its proposed undertakings in lieu of reference to the Competition Commission with respect to its proposed acquisition of BSkyB.
“Should the Secretary of State for Culture, Olympics, Media and Sport decide on this basis to refer the proposed transaction to the Competition Commission for a detailed review, News Corporation is ready to engage with the Competition Commission on substance.
‘News Corporation continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the UK.”
Hunt made his announcement to the Commons at around 4.20pm, and said that his decision had been prompted by the News Corp move.
Hunt’s statement to Parliament in full:
“Mr Speaker the events of last week shocked the nation. Our proud tradition of journalism, which for centuries has bravely held those in positions of power or responsibility to account without fear or favour, was shaken by the revelation of what we now know to have happened at News of the World.
“The perpetrators of those acts not only broke the law, they prayed on the grief of families who had lost loved ones either as a result of foul murders or giving their life for their country. I hope the law shows no mercy on those responsible and no mercy on any managers who condoned such appalling behaviour.
“As a result of what happened the Prime Minister last week announced two independent enquiries to examine what went wrong and recommend to the government how we can make sure it never happens again.
“First, a full, judge led, public inquiry into the original police investigation. Witnesses will be questioned under oath and no stone will be left unturned. As The Prime Minister announced on Friday that Inquiry will need to answer the following questions.
“Why did the first police investigation fail? What exactly was going on at the News of the World, and what was going on at other newspapers? The bulk of the work of this inquiry can only happen after the police investigation has finished but we will start what we can now.
“Second, a separate inquiry to look at the culture, the practices and the ethics of the British press. In particular, they will look at how our newspapers are regulated and make recommendations for the future. That Inquiry should start as soon as possible, ideally this summer.
“As the Prime Minister said a free press is an essential component of our democracy and for our way of life. But press freedom does not mean that the press should be above the law and in announcing this inquiry the Prime Minister has invited views on the way the press should be regulated in the future.
“I also have to make a decision about News Corporation’s plans to buy the shares it does not already own in BSkyB. I know that colleagues on all sides of this House and the public at home feel very concerned at the prospect of the organisation which allegedly allowed these terrible things to happen being allowed to take control of what would become Britain’s biggest media company.
“I understand that in the last few minutes News Corporation have withdrawn their Undertakings in Lieu. On January 25th I said I was minded to refer News Corporation’s proposed merger with BSkyB to the Competition Commission in the absence of any specific undertakings in lieu.
“As a result of News Corporation’s announcement this afternoon I am now going to refer this to the Competition Commission with immediate effect and will be writing to them this afternoon.
“Today’s announcement will be an outcome that I am sure the whole house will welcome. It will mean that the Competition Commission will be able to give further full and exhaustive consideration of this merger taking into account all relevant recent developments.
“Mr Speaker, protecting our tradition of a strong, free and independent media is the most sacred responsibility I have as Culture Secretary. Irresponsible, illegal and callous behaviour damages that freedom by weakening public support for the self-regulation upon which it has thrived.
“By dealing decisively with the abuses of power we have seen, hopefully on a cross-party basis, this government intends to strengthen and not diminish press freedom, making this country once again proud and not ashamed of the journalism that so shapes our democracy.”