Sky-Fox deal not in public interest, watchdog says

The proposed £11.7 billion takeover of Sky by 21st Century Fox is not in the public interest, the UK's Competition and Markets Authority (CMA) has said.

Officials claimed the merger would give Fox too much control over Britiain’s news media.

The CMA said if Rupert Murdoch-owned Fox's plan to take full control of Sky went ahead, it was "likely to operate against the public interest".

However, the watchdog added despite concerns over media plurality, the takeover would not impact on broadcasting standards.

Three proposals have now been put forward to tackle the concerns.

One would see the deal blocked completely, another would see a spin-off of Sky News created and a third would see regulations put in place to protect the news channel from direct influence of the Murdoch Family Trust.

Disney has agreed to buy most of Fox's business, so may end up owning Sky.

Disney's proposed takeover, which still has to be approved by US regulators, includes Fox's current 39 per cent stake in Sky.

And if the Sky-Fox deal does finally go through, the whole of Sky would be likely to transfer to Disney's ownership.

Anne Lambert, chairwoman of the CMA's independent investigation group, said: "Media plurality goes to the heart of our democratic process. It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.

"We have provisionally found that if the Fox/Sky merger went ahead as proposed, it would be against the public interest. It would result in the Murdoch family having too much control over news providers in the UK, and too much influence over public opinion and the political agenda."

Fox said it was "disappointed" at the provisional ruling.

The company said it will push ahead with talks with the CMA ahead of the publication of its final report, which has now been put back to May 1.

It added it still expects regulatory approval of the deal by June 30.

Sky said it "noted" the CMA's initial findings and that the regulator is seeking submissions on possible remedies regarding its plurality concerns.