Sky Merger Statement House of Commons

similar issues in our constituencies and I know that right across

government officials and ministers are very sympathetic to these cases

and do try to expedite them as quickly as possible. SPEAKER:

Statement, the Secretary of State for Culture, Media and Sport,

secretary Karen Bradley. Thank you, Mr Speaker. I came to this House on

the 16th of March to confirm that I had issued a European intervention

notice in relation to the proposed merger between 21st-century fox and

Sky plc on the grounds of media plurality and commitment to

broadcasting standards. That triggered a requirement for Ofcom to

report, initially by the 16th of May but extended to the 20th of June on

the media public interest considerations and for the

Competition and Markets Authority, the CMA, one jurisdiction. I issued

a statement last week to confirm that I had received those reports

and undertook to both publish them today and to come to the House to

set out my minded to decision on the next step in this process, which is

whether or not to refer the merger to a fuller phase two investigation.

In line with my commitments I am today publishing both documents,

copies of which will also be deposited in the libraries of both

houses. I will also publish later today the letter to both parties

with my decision, which I sent to them this morning. Separately, Ofcom

is today publishing its fit and proper assessment of the merged

company. This reflects its ongoing responsibility as the independent

regulator under the broadcasting Acts to monitor who is fit and

proper to a broadcast license. Decisions made by the Secretary of

State under the enterprise act or made on a quasi judicial basis. I

want to be clear about what that means. When taking a quasi-judicial

basis -- decision, I am tightly bound. I must take my decision only

on the evidence that is relevant. My decision cannot be based on opinion,

speculation or conjecture. Any decision must be objectively

justified by the facts before me. I must set aside wider political

considerations, going beyond the scope of the legislation. I must act

independently and follow a process that is scrupulously and impartial.

This is what I am doing. On the question of whether the merger gives

rise to public interest concerns in relation to media plurality, Ofcom

concludes, the transaction raises public interest concerns as a result

of the risk of increased influence by members of the Murdoch family

trust over the UK news agenda and political process. With its unique

presence on radio, television, in print and online. We consider these

concerns may justify reference by the Secretary of State to the

Competition and Markets Authority. On the basis of Ofcom's assessment I

confirm I am minded to refer to a face to investigation on the grounds

of media plurality. The reasoning and evidence are persuasive. The

proposed entity would have the third largest total breach of any news

provider, lower the only than the BBC and ITV. It would span

television, radio, newspapers and online. Ofcom's report says that it

would give the Murdoch family trust material evidence over news

providers. This potentially raises public interest concerns because in

Ofcom's view, the transaction may increase members of the Murdoch

family trust's ability to influence the overall news agenda and the

ability to influence the political process, and it may also result in

the perception of increased influence. These are clear grounds

were by referral to a phrase two investigation are warranted. There

is however a statutory process I must follow. I required by

legislation to allow the parties the opportunity to make representations

to me on this position before I reach a decision. I will now do that

and have given them until Friday the 14th of July to respond. The second

question concerns whether, after the merger, the relevant media

enterprises would have a genuine commitment to broadcasting

standards. Ofcom concludes that, in light of Fox's and Sky's business

records, we do not consider that the merged entity would like a genuine

commitment to the attainment of broadcasting standards. Therefore we

consider there are no broadcasting standards concerns that may justify

a reference by the Secretary of State to become additional markets

authority. Ofcom's approach sought to measure commitment to

broadcasting standards by reference to breaches of regulatory codes. It

found that Fox's compliance with the UK's compliance code is in line with

comparable broadcasters. North of their compliance record in relation

to overseas jurisdictions give cause for concern. -- nor did the. I also

asked Ofcom to consider any effect of corporate governors on this

consideration. Ofcom did this in respect of its secondary

consideration of whether Fox and Sky would be fit to hold broadcast

license -- licenses. It held that -- these did not in its views

demonstrate that the merged company would like a genuine commitment to

broadcasting standards. In reaching a view, I have to be guided only by

the evidence before me. As such, based on the Ofcom report, I am

currently minded not to refer to a phase two investigation in relation

to a general commitment to broadcasting standards. I am giving

the parties and opportunities -- over Shittu to make representatives

in relation to media plurality grounds. In the interest of

transparency, I will also invite wider representations on the

question is to represent -- broadcasting standards. Parties

responding to the consultation should not simply duplicate any

representations previously made to Ofcom. Instead, responses should be

limited to setting out any new and substantial evidence and any comment

to Ofcom's overall approach. Rather a strong feelings among supporters

and opponents of this merger, in this quasi judicial approach, I can

only be guided by evidence, and not by who shouts loudest. Under the

process set out in the enterprise act, it is open to the parties to

propose undertakings in view of a reference to the CMA for a more

detailed investigation, in other words the parties May seek to avoid

a phase two reference by proposing remedies to address the public

interest concerns that have been identified. The decision as to

whether or not to accept undertaking is for the Secretary of State alone,

however, the parties proposed a set of undertakings to Ofcom and Ofcom

commented on them. Proposed undertakings centred around Fox

maintaining the editorial independence of Sky News. And any

changes to Sky News editorial guidelines. The only -- also include

a commitment to maintain Sky branded news for five years with spending

similar levels to now. Ofcom's view were -- was that these measures

would mitigate plurality concerns. They also suggested the remedies

could be further strengthened. The parties last week without prejudice

to my decision today formally submitted undertakings in largely

the same terms to me. In accordance with the legislation, if I still

intend to refer the merger after considering representations from the

party, I required to consider whether or not these bodies are

appropriate. Given the parties have offered these undertakings and Ofcom

have commented, I have taken an initial view, and I have today

written to the parties indicated that I am minded not to accept the

undertakings that have been offered. While Ofcom suggests they may

mitigate its concerns, it is for the Secretary of

State to decide whether or not this efficiently mitigate awfully remedy

what are serious public interest considerations. I know that Ofcom's

report says we recognise that behavioural undertakings can be

difficult to monitor, and that there are areas where the proposed

undertakings could be strengthened. It cites questions regarding the

ongoing arrangements for the appointment of independent members

of the Sky News editorial board, and the period of Fox's commitment to

maintaining its investment in Sky News. I also note the guidance of

the markets authority, which says that in ordinary Kim -- cases it is

highly unlikely to accept behavioural limitations -- remedies

that phase one. I have given the parties ten working days to make

representations on the decisions I have reached. If I receive further

offers of undertakings, I will keep the House informed on how I intend

to structure the statutory process must follow considering them. As I

have set out, I will now take representations on my positions. The

call will remain open for ten working days, and they will then

consider the evidence received before coming to a final decision on

both grounds. To be clear, the minded to decisions are not my final

decisions. A word before I close. As the independent regulator, Ofcom's

fit and proper -- I have seen the report and no many members will want

to comment on it. However, given my current role and the merger, I will

not be commenting on its findings. It is rightly not for Government to

determine who should and should not hold TV broadcasting licences. Ofcom

has an ongoing duty to ensure all organisations are fit and proper to

hold broadcasting licences. If evidence -- in the evidence comes to

light, it is Ofcom's it is for Ofcom to consider it. I trust this

statement gives an option to do to debate this position well at the

same time respecting the limits of what I can say given my ongoing

quasi judicial role. I commend this statement to the House. I thank the

Secretary of State for her statement, albeit in redacted form,

which is utterly ridiculous. This decision was delayed as a result of

the unexpected General Election campaign. I help the party opposite

found those weeks as productive as we did on this side of the House,

but nothing about this decision is a surprise. It is the old playbook,

the Secretary of State has known all along what wants to end up doing,

but she has two establish -- follow the established dance steps. So let

me make a prediction. The parties have proposed some pretty minor

undertakings in you. They always knew they were not going to be

enough to satisfy Ofcom, so the Secretary of State will demand extra

conditions, as a result of which she will get written up as a tough

operator. The parties will offer something new which they always had

in their back pocket, the Secretary of State will accept them, and this

merger will go ahead. Well, let me tell the Secretary of State the

problem with Murdoch's undertakings. Not just these undertakings, but any

undertakings in lieu which have never been undertaken -- offered by

the Murdoch family. Ask Harold Evans or James Harding about the

guarantees of a -- editorial or independence. Can the Secretary of

State name any undertakings in lieu that the Murdoch family have ever

made that have been respected? And if the current rules mean that James

Murdoch can't pass a fit and proper test, given everything we know about

his behaviour over phone hacking, and given everything we know about

Fox's behaviour over the ongoing sexual harassment scandal and the

United States, that says more about the rules than about Mr Murdoch. --

can pass a fit and proper test. If the current Conservative Government

will not risk -- rewrite the rules, the next Labour Government will.

This company has been found guilty of significant corporate failure,

and yet this bid process can go ahead. In fact over the next 12

months the Labour Party will be reviewing media ownership rules in

the UK, and let me put the media barons on notice. The days when

citizens of other countries can dominate our media markets while

paying their taxes overseas have got to end. The truth is, the world is

changing. And it is time the Conservative Party realised it. We

have seen what looks like an implicit bargain between the

Conservative Party and the Murdoch Empire over recent years, the

Conservatives will give Murdoch what he wanted, the Sky deal, and Murdoch

would deliver Theresa May the landslide victory she craved. Well,

it hasn't quite worked out that way, has eight? Rupert Murdoch has not

delivered his side of the bargain, has he? His papers may have done

their best to urge a Tory landslide, but he couldn't follow through. He

is not what he was. It wasn't the sun that one it. The Sun told

Britain, don't chuck Britain in the bin. But Britain and chucked the

Tory manifesto in the bin instead. -- chuck Britain in the Corbyn.

Murdoch wasn't any use to the Tories. They do not need to be any

use to him any more. And if I was speaking to the Minister outside the

chamber I would say to her, at long last, you are free. You can do the

right thing. And one way of signalling that freedom would be to

go ahead and order parte two of the liver some inquiry. Notwithstanding

Ofcom's fit and proper investment, the only way to get to the bottom of

corporate governance issues is that the Secretary of State should hold

parte two of the inquiry. She doesn't have a mandate to drop

Leveson two. Does the Secretary of State worry that given this autumn

James Murdoch is facing a civil trial in the High Court over new

allegations of hacking, and the destruction of evidence summary:

does she think she might come out of this process with egg all over her

face? How can this process possibly proceed, with these cases hanging

over them? Before she makes her final decision, can she guaranteed

to let the House now what the Prime Minister discussed with Rupert

Murdoch at their private meeting in New York last year?

Mr Speaker. I am disappointed at the honourable gentleman. I have come

here to be fair and proper in a quasi judicial process and he is

choosing to make it party political and that is a shame. It is very

cynical of him. You should judge me on my record. Throughout this whole

process I have been scrupulously fair and I have looked at the

evidence and analysis available to me. He should not prejudge any

decisions that I take. I will take them on the basis of the evidence

and analysis given to me and that icy and I will make an appropriate

judgment based on that evidence. Hope that he will give me credit for

the fact that so far I have done that and will continue to do that.

Mr John Whittingdale. Me I commend my Right Honourable

friend on the scrupulous way in which she is both following the

advice that she has been given and also giving the maximum opportunity

for interested parties to comment at each stage. Would she also agree

that the only thing on which the opposition spokesman was correct was

in saying that when it comes to plurality it is becoming

increasingly obvious, and the general election bears this out,

that the printed press are a waning influence and the real media giants

today are companies like Google and social media giants? My Right

Honourable friend who has significant experience in this area

and a great track record is absolutely right that we did see,

particularly during the general election, the power and influence of

social media companies, who simply do not have to abide by the same

rules of impartiality, fairness and checking sources that the mainstream

media do. I thank him for his comments about the approach I have

taken to this merger. Whatever final decision I will take, I will take it

on the basis of the evidence. I want to make sure that we are as

transparent as possible because there is great public interest in

this issue and I want to make sure whatever final decision I take it is

understood by the public and respected. Brendan O'Hara. I thank

the Secretary of State for the prior sight of her statement. Ofcom has

serious concerns about the further concentration of media ownership in

fewer and fewer hands and we welcome the fact she is minded to refer this

to the Competition and Markets Authority on the grounds of

diminishing plurality. In doing so she will bolster public confidence

that recognising plurality and diversity are vital components of an

independent media. In her statement she said that the guarantee she

received from Fox that it does not go far enough. Should she outlined

what it is she looking for from Fox to guarantee that independence of

editorial standards? Issue satisfied the current arrangements,...

Mr Speaker, if I can take the latter comment about the fit and proper

person test, I think it would be extraordinary to be in a situation

where it was government ministers who had any form of say over who

held a broadcasting licence. I think it is absolutely right that is with

Ofcom and if he has questions about the Ofcom process and Ofcom report

when he sees it then he should address those questions to Ofcom in

order that they can give him that comfort that he needs. He asks what

it is I'm looking for when it comes to undertakings. Again, it is not

for me to prejudge that. I have set out today that I give all parties

ten working days to come forward. That is, interested bodies who was

do not wish to make further presentations on broadcasting

standards and media plurality, and the parties themselves on the matter

of further undertakings they may wish to make or other matters on my

mind it too decisions and at that point I will make a decision. Damian

Collins. In terms of media plurality what

consideration has been given as the member for moulding raises, to the

world in which we live today were increasingly people get news on

Facebook, and in the future of the television market, the merger of two

companies, being dominated by the financial power and influence of

companies like Netflix and Amazon? Mr Speaker, my honourable friend

will see the Ofcom report which should have been published now and

will see the consideration taken. One of the points of note is that in

terms of the Fox - Sky merger, the concern was this is a media company

that has positions on both broadcast, radio, newsprint, and

online, which is unique compared to other media organisations. He's

right that we are in an ever changing media landscape and one

that we need to be cognisant of when looking at how to ensure that the

public receives a wide and diverse range of accurate and fair news. Ed

Miliband. Can I start by welcoming the fact the Ofcom report says they

should be a referral to the CMA on the grounds of plurality and urge

the Secretary of State is not to do a grubby deal with the Murdochs. We

know their history, as my Right Honourable friend on the front bench

says, they break every undertaking they make to the Times to the Wall

Street Journal. About broadcasting standards, what does it take to be

declared on fit and proper to hold a broadcast license? Ofcom have

apparently found a second significant corporate failure on the

part of the Murdochs. In terms of her responsibilities in terms of

broadcast standards, we have an entity found responsible for this

second huge corporate failure at Fox News after News International.

Regarding the fit and proper person is test I would ask him to put those

concerns to Ofcom, they have the independent role. He will see their

report later today. It ill behoves him to use the term grubby when it

comes to the work that we will do. If undertakings are given, and if as

a result of those undertakings I am minded to consider them, there will

be a full statutory public consultation on those undertakings

so that we can be as transparent as possible, so that they can be no

allegations of anything being grubby at all. I'm glad that the Secretary

of State has pointed to the need to make decisions on the basis of

evidence. She will be aware that there was a long e-mail campaign of

rather emotional e-mails on this. What role have they played in her

thinking and how will that help to retain public confidence. I thank my

honourable friend for the comments. The petitions and campaigns that he

refers to have been considered as part of Ofcom's work. He will see in

the report Ofcom have considered over 51,000 responses as part of

their work. He is right that in my role, the quasi judicial role, I'm

obliged to look at the evidence and analysis before me. I have made the

comments in my statement that shouting the loudest is not

necessarily the way to get the result of one wants. We are looking

for evidence and we are looking for new substantive evidence that may

make a change to this decision. Sir Vince Cable.

Is it not the case that the Internet companies which have been referred

to, are essentially aggregators of news rather than independent

providers? A company that is the leading supplier of newspaper

content, the second leading supplier of radio content, and the third

largest provider of content is a threat to plurality? Mr Speaker, can

I welcome the Right Honourable gentleman back to this House. He is

right that there is much of the Internet news that we see which is

content which has been previously written and owned by other

providers, and he is right in his assessment of that. But in terms of

the comments on media plurality, that is why I am minded to refer to

a Phase inquiry. On the subject of phone hacking I would like to remind

the House it wasn't just the News of the World that was guilty. The

Mirror newspaper was found guilty of hacking. Back to the subject of

evidence, and following on from the point my honourable friend full

Hendley made, she will mow that there have been a number of

identical e-mails from organisations -- Henley. Quite properly like 38

Deg. From her statement she drew the difference between evidence and

perception. Is it's not evidence which is now required? My honourable

friend is right. It is evidence. I am sure there will be more e-mail

campaigns. I can assure my honourable friend that my inbox is

full completely to bursting of identical responses from around the

world. But emotional perception is not evidence. What we need is

evidence in order to enable us to make a decision in a quasi judicial

way. Ben Bradshaw. She asks us to judge her on her record which I will

happily do. When will she keep the promises made to the victims after

the Leveson Inquiry? Both announce Leveson two and and Section 40 of

the crime and Courts act, which disgracefully was passed almost

unanimously by both houses and has to not been implement it by the

government? Mr Speaker, we have had a consultation on what should be the

next steps with regard to the second part of the Leveson Inquiry and

Section 40. I will be publishing the responses to that consultation.

There is a process that I need to go through as Secretary of State in

order to take anything further. I think we need to remember that the

Leveson Inquiry was 2011. Many things have happened, many things

have changed in that time. We also have to think about how best we

support local press and have a free, fair and vibrant local press. I will

be looking at all of those points when considering responses to the

consultation. Thank you, Mr Speaker. I thank the Secretary of State for

her statement and fully recognise her quasi judicial role. During the

election campaign on the doorsteps constituents raised with me there

concerns about bias across various media and online platforms. The

concern about value for money and about plurality. Easy for me to say!

meanwhile, agree that this referral meanwhile, agree that this referral

will give the public confidence when it comes to this and what they are

actually taking out of the media or is it purely conjecture? I thank my

honourable friend and I had a similar conversations on the

doorstep in my constituency and other parts of the country. That's

why it is important there is full public confidence and we have a

transparent process the public can have confidence in. If she had sat

in the High Court day after day as I had to do as a victim of phone

hacking she would have heard endless examples and evidence, yes, real

evidence heard in court before a judge, of the corruption that the

Murdochs perpetuated deliberately in the British political system. The

truth of the matter is you cannot possibly now make a proper final

judgment on whether the Murdochs are proper people to have any broadcast

license in this country unless you hear more evidence in court in

Leveson two. Mr Speaker, the point is that that evidence was heard in

court and Ofcom have looked at that evidence as part of all the work

they have been doing and I suggest he takes his points about fit and

proper person with Ofcom. Mr Peter Bone. Can I thank the excellent

Secretary of State for coming to the House and making such a clear

statement. One of the things that seemed to me in the statement was

14th July cropped up as the date when responses could be given. We

are going to be going into recess shortly after that date. Can the

Secretary of State assure us we will not have a final decision while the

House is not sitting? Can I just add to one thing one of my honourable

friend said, that on the doorstep media bias came up a lot but I'm

afraid it was media bias by the BBC. They suggested to me that they

should be called the Brussels broadcasting Corporation.

Mr Speaker, I am acutely aware of the Parliamentary timetable force on

the 14th of July, I hope, will enable me to have time from that

date to before the House rises to come back to the House with any

further updates. But I will endeavour, as I have throughout this

process, to ensure that the House is updated before anybody else. Hannah

Bardell. Thank you, Mr Speaker. Sky Television is the largest employer

in my Livingston constituency, so can I ask the Honourable Lady that

she make sure in any considerations she make sure in any considerations

and discussions she has, that the workers of both organisations and

their jobs are given full and proper consideration? And further to that,

as my honourable friend tried to elicit from her, she seems to know

what isn't good enough for the process, but surely she must know

what will be good enough. Surely that should be written down,

published and will be evidence presented and put forward so we can

have confidence in the process. I do of course recognise the issue with

regard to people working for the organisations and employees and we

need to be mindful of that. That is why in many ways it's important that

decisions are taken in as prompt a time as possible in order that

uncertainty does not persist and pervade. But it would not be right

for me to in any way try and set out today what I think would be

appropriate or not. It is for the parties to come forward with their

representations and for me to make a decision as to whether I think they

are appropriate to stop they phased two referral.

Is the Minister aware of her total failure to see the link between on

the one hand a fit and proper test, and on the other hand regular

arrangements with them that might lead to some reduction in the

influence of market share? Unless they are fit and proper, they will

never meet those regulations. We know the first is not there, why the

second? In the process for the media merger, I have a responsibility, if

quasi-judicial role, to ensure that the public interest test of the

enterprise act 2002 are fully met, and that media plurality, which is

the question he raised, is dealt with. That is an ongoing test for

the independent regulator, Ofcom, and I would suggest he refers those

comments to them. As to commitment to broadcasting standards, many of

the same issues are considered as are considered for the fit and

proper persons test, and he will see in the report exactly what Ofcom

say. If he has further substantive comments to make, I suggest he makes

them as part of that process. I thank the Secretary of State for her

statement. I am sure she will be reflecting on contrasting the

broadcasting regulations with what exists online, and a huge impact

that has. Even a hypothetical Fox news UK would have to be very

different to its US sibling. Any broadcaster in the United Kingdom

has to comply with the broadcasting codes, has to meet our tests of

impartiality, has to meet our tests of credibility and fair reporting,

and that may be very different from the tests employed -- applied in

other countries. While we welcome the Secretary of State is minded to

refer the proposed acquisition for fuller investigation by the CMA, and

we are pleased the statement does recognise the danger of too much

power -- media power in the hands of too many individuals, we would ask

her if in light of her previous references to failures of corporate

Government -- governance, in reference to phone hacking, is she

now believes a CMA inquiry will go far enough to tackle wholesale the

problems at Sky? I welcome the honourable lady to hear. -- to this

place. I am obliged under the process to comply with the terms of

the enterprise act 2002, and I am following those processes

scrupulously. In terms of broadcasting standards, does she

recall the anger over the Fox news broadcaster claimed that birds --

Birmingham is a city where Muslims simply cannot go? If she approves

this merger, what assurance can she give us that she can event that kind

of offensive knowledge -- nonsense being allowed on a Sky News

broadcast in this country? Any broadcaster in the UK has to comply

with broadcasting codes. And those codes are different to those in

other countries. I welcome the Minister's statement. The merger

test busby fit and proper, there are many concerns that this fit -- there

are doubts that the new service will be impartial. Is it right that one

body controls so much of the media outlet, too much control in the

hands of too few is surely a danger? And that is why I am minded to refer

to a face two inquiry to ensure that we do have full confidence in

whatever decision I finally take. -- a phase two inquiry. In coming to

its view on their commitment to broadcasting standards, did Ofcom

take account of the new civil case in which the judge, on phone

hacking, has required James Murdoch to surrender his personal laptop? I

would have to ask the honourable lady to wait for the Ofcom report

and to look at that, but I would remind her that the duty on Ofcom on

fit and proper person is an ongoing duty, Iniesta because of the

reviewed and reflected upon, and that is for Ofcom to do. -- it needs

to be reviewed. Union-macro our predecessors determined that the

broadcasters should have a duty of balance in our news, as a result of

which we trust the broadcasters to a greater or lesser extent than the

press which carried out a campaign of character assassination on the

leader of my party in the election. And rightly, the views of the BBC

trusted the truth rather than the propaganda. But don't we have --

aren't we in a world where fake news is a real danger, and activities

that are invisible and outside the nature of all the controls we have?.

We need a new charter for all news? -- do we not need? We announced in

the Queen's Speech that we are looking to construct a digital

charter which will look at the way that people access information off

the Internet. And he right, I think we were all victims in this House of

what appeared to be an echo chamber of people who would put something

completely vile and false on social media, and it was reinforced and

repeated time and time again, that is simply not acceptable, it is

something I have raised with the social media companies and will

continue to do so. The Conservative Party has blocked never said two.

How can we respect the quasi-judicial role of the Secretary

of State when she is closing of the hearing of additional evidence that

was promised by the Prime Minister David Cameron would be heard to the

victims of phone hacking? -- the Conservative Party has blocked

Leveson two. These are different matters, and I am bound by the

evidence before me. I'm sure the Secretary of State sees through some

of the humbug on the Labour benches concerning the former leader who

warmed the bed of the media mogul who became the godparent to James

Murdoch's stepsister. But can I congratulate the Minister for the

way she has conducted herself today, in the handling of this report? And

look forward to being able to make representations. What MPs be able to

meet her personally or will we have to write to her to make their case?

-- will they be able to. I am happy to meet members, but can recommend

he makes requests through the official line. Before they come to

points