The Competition and Markets Authority (CMA) have intervened in 21st Century Fox’s planned takeover of Sky due to a provisional finding that it would not be in the public interest due to ‘media plurality’ concerns.
The CMA has stated that if the takeover proceeded as presently structured, it was likely to operate against the public interest because it would lead to the Murdoch Family Trust, which controls Fox and News Corporation, increasing its control over Sky, such that it would exercise ‘too much control’ over news providers in the UK across all media platforms. This provisional decision reflects the CMA’s overarching concern and remit to protect consumer choice in the UK - in this instance, unfettered access to a free press, which the CMA voiced goes to the heart of the UK’s democratic process.
The CMA’s ongoing investigation into this takeover bid serves as a robust reminder that the corporate structuring of transactions should carefully encompass competition law principles from the outset, so that such transactions remain commercially viable from a regulatory and litigation standpoint. A competition law policy should ideally be considered and implemented from the outset of any corporate deal accordingly, so as to proactively dissuade any interest from the CMA and expediently rebut any future findings.
The CMA will issue its final decision on 1 May after Fox have responded to their provisional findings.