News Corp Bid To Go To Competition Commission

The Culture Secretary has announced he is to refer News Corp's bid for BSkyB to the Competition Commission after the company said it was withdrawing undertakings to the Government.

Sky sources have said News Corp is not dropping its bid for BSkyB but has withdrawn its proposed undertakings to hive off Sky News as a separate company.

A full Competition Commission inquiry into the proposed takeover will now take place and is expected to last a year.

As analysts warned the bid was looking increasingly likely to fail, News Corp said it continued to believe its proposal will not lead to "insufficient plurality in news provision".

In a statement, the company said: "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."

Mr Hunt told the Commons: "As a result of News Corporation's announcement this afternoon I am now going to refer this to the Competition Commission with immediate effect."

He told MPs that he hoped the law "shows no mercy" to those involved in phone hacking - including "any managers who condoned such appalling behaviour".

Labour leader Ed Miliband took the unusual step of responding to the statement personally and accused Prime Minister David Cameron of leaving Mr Hunt to "carry the can" in an "insult to the House and to the British public".

Uncertainty over the takeover has seen BSkyB's shares fall sharply. News Corp already holds 39% of shares in BSkyB, which owns Sky News.

It comes after the Deputy Prime Minister Nick Clegg called on Rupert Murdoch to "do the decent thing" and reconsider his bid for BSkyB.

Mr Hunt has already written to Ofcom for advice on News Corporation's proposed takeover, amid mounting pressure for the deal to be blocked.

Mr Hunt has asked if the closure of the News Of The World gives the body "additional concerns in respect of plurality".

He also asked Ofcom for their view on "consideration or any potential future decision in relation to the fit and proper person test [that] might have an impact on the merger and my decision on media plurality or on the proposed undertakings in lieu".

Finally, he asked: "Given the well-publicised matters involving the News Of The World in the past week that led to its closure, I would be grateful if you could let me know whether you consider that any new information that has come to light causes you to reconsider any part of your previous advice to me including your confidence in the credibility, sustainability or practicalities of the undertakings offered by News Corporation."

In an appeal to Mr Murdoch, the Deputy Prime Minister earlier said: "Do the decent and sensible thing, and reconsider, think again, about your bid for BSkyB."

Mr Clegg spoke after meeting the parents and sister of murdered schoolgirl Milly Dowler, whose phone was allegedly hacked by the News Of The World after she went missing in 2002.

He said: "Listening to Bob, Sally and Gemma Dowler, it reminds you that it is innocent families like them who have paid a very heavy price for truly grotesque journalistic practices, which are simply beneath contempt.

"We owe it to the Dowlers and other innocent victims of hacking to get these inquiries right, to make sure they are really strong, they can get to the bottom of what happened and make sure it never happens again."

Mr Murdoch was urged by Labour leader Ed Miliband to put his expansion plans on hold for the duration of the criminal probe and also repeated his calls for Rebekah Brooks - NOTW editor at the time Milly Dowler's phone was allegedly hacked - to be removed.

The Prime Minister announced on Friday there would be two public inquiries, one led by a judge looking into phone hacking by newspapers and possible corruption involving police officers taking cash for information - and another into the wider question of press regulation.

Former News Of The World editor Andy Coulson, ex-royal editor Clive Goodman and an unnamed 63-year-old man were all arrested and questioned by detectives over recent days before being released on police bail until October.