Sky and 21st Century Fox: Proposed Merger - Statement

Part of the debate – in the House of Lords at 12:43 pm on 16th March 2017.

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Photo of Lord Keen of Elie Lord Keen of Elie The Advocate-General for Scotland, Lords Spokesperson (Ministry of Justice) 12:43 pm, 16th March 2017

My Lords, with the leave of the House, I shall repeat a Statement delivered in the other place by my right honourable friend the Secretary of State for Culture, Media and Sport. The Statement is as follows:

“I came to this House on 6 March to give an update on the proposed merger between 21st Century Fox and Sky. At the 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 which 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 invite further representations in writing from the parties and gave them until last Wednesday to provide them.

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, informing them of my decision.

While the representations from 21st Century Fox highlighted areas where it contested the position taken in my ‘minded to’ letter, none of the representations has led me to dismiss the concerns I have regarding the two public interest grounds that 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 these public interest considerations and from the CMA on jurisdiction issues. I note that, overall, the parties have welcomed a thorough regulatory review, which 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 these 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 the merger. These issues relate to questions about the application of the fit and proper test by Ofcom—I will come to these issues shortly.

As I previously set out, this decision will now trigger action by Ofcom to assess and report to me on the public interest grounds that I have specified and for the Competition and Markets Authority 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 this Government, comment substantively on the case as it proceeds. I will, 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 debate both here and in the other place focused on the question of Ofcom’s assessment of whether a licensee is fit and proper, including the ongoing duty which falls to Ofcom under the Broadcasting Acts 1990 and 1996.

I have received representations from the honourable Member for West Bromwich East and from the right honourable Member for Doncaster North, as well as from a number of other parties, on adding fit and proper as a new public interest consideration in the Enterprise Act. I want to assure them that I have 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 Members of this House and the other place support. It is a view which I fully and unequivocally endorse. I am also clear that assessing whether someone is fit and proper to hold a broadcasting licence is a different requirement, and one that, quite rightly, sits with the independent regulator, Ofcom.

On Monday, Ofcom announced that it will conduct its fit and proper assessment at the same time as it would consider 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 clarity for the parties but also provide reassurance to those who have expressed their own concerns about this issue, that this is a matter which Ofcom will now consider before the merger takes place.

I trust, as before, that this update is helpful to honourable and right honourable Members and that this Statement gives an opportunity to debate this important issue, but at the same time respecting the limits of what I can say, as I mentioned earlier, given my ongoing quasi-judicial role in relation to this merger. I commend this Statement to the House”.