News Corp and BSkyB attack Ofcom over bid report

News Corporation and BSkyB have attacked broadcasting regulator Ofcom over its recommendation that a proposed merger between the two be referred to the Competition Commission.

Ofcom's report, published today, advises the culture secretary Jeremy Hunt that News Corp's BSkyB takeover bid "may be expected to operate against the public interest". But News Corp responded today by accusing the regulator of failing to approach its assessment with and open mind and of carrying out the review with the intention of identifying concerns.

News Corp's criticisms were echoed by BSkyB, which claimed that Ofcom had "subtly recast the statutory formulation of the 'media plurality' test" and approached the questions it has answered in a "distorted manner".

BSkyB's response goes on to advise the culture secretary that it "would not be appropriate" for him to adopt Ofcom's advice.

"It falls to the Secretary of State to make his own assessment of the evidence, on the basis of which he might reasonably reach different conclusions from Ofcom's as to whether the threshold for a reference to the CC [Competition Commission] is met".

Ofcom was originally asked to investigate the impact of the proposed bid in November last year by business secretary Vince Cable, who issued an intervention notice when the bid was formally announced. Ofcom was then required to assess the risk the bid posed to the media plurality and the public interest.

Ofcom's report, which was submitted to Hunt after he took over responsibility for the decision, recommends that the bid be referred to the Competition Commission.

Hunt announced today that he intended to follow Ofcom's advice and refer the bid, but added his decision would be delayed until he had heard further "undertakings" from the merging parties.

BSkyB called on Hunt today to assess the Ofcom report with an "open mind" and "with reference to a correct understanding of the relevant media plurality test".

The broadcaster proposes that as a result Hunt will conclude three points: that Ofcom has "overstated the risk" of the proposed bid, that there is a "minimal, if any" risk that the proposed transaction might operate against the public interest; and finally that "it would be reasonable" for him to not refer the matter to the Competition Commission.

News Corp added that it thought Ofcom had privileged other submissions over its own and omitted evidence from its report.

"Ofcom has been notably more receptive to submissions made by third party complainants than it has been to submissions made by News and has selectively omitted relevant evidence."

Ofcom responded to the criticism today, rejecting News Corp's and BSkyB's accusations.

"News Corporation’s response makes a series of assertions of purported errors by Ofcom in its report. Ofcom entirely rejects this analysis and we refer to our report for a clear, accurate and independent assessment of the public interest issues.
 
"Specifically, News Corporation alleges that Ofcom did not have an open mind when considering the issue of plurality referred to it by the Secretary of State. This allegation is without foundation.
 
“News Corporation seeks to suggest that there are undisclosed documents that might support its allegation. In fact, on 7 January Ofcom fully disclosed all relevant communication between Ofcom and BIS in a Freedom of Information response. These documents, which are available on Ofcom’s website for public scrutiny, show that Ofcom’s dealings have been absolutely proper at all times."

Image of Ofcom offices by Matt Biddulph on Flickr. Some rights reserved

Free daily newsletter

If you like our news and feature articles, you can sign up to receive our free daily (Mon-Fri) email newsletter (mobile friendly).