Vince Cable refers Sky takeover bid to Ofcom
Vince Cable has referred the takeover bid for BSkyB by News Corporation to the media regulator Ofcom.
Vince Cable has referred the takeover bid for BSkyB by News Corporation to the media regulator Ofcom. News Corporation, which is owned by Rupert Murdoc, wanted to buy the 61% of Sky it currently does not own giving Murdoc complete control of the UK broadcaster. However, the prospect of such a takeover of Sky by News Corp has not gone down well with Murdoc’s UK rivals who fear the move will give the Murdoc empire too much power within the UK media.
There was an open letter written to Vince Cable, by the likes of Mark Thompson (the BBC Director General) and the editors of other UK papers such as the Daily Mirror, which urged the secretary to refer the deal to Ofcom. Murdoc’s empire, through its newspapers The Times and The Sun, have dismissed concerns regarding the takeover of Sky and have claimed it is merely rivals trying to cause trouble. News Corporation has previously accused of BBC of “empire building”.
However, last night Labour joined calls for the takeover bid to be referred to the media watchdog, Ofcom. In the run up to the election News Corporation’s UK papers switched their support to David Cameron and the Conservative Party. Now, according to Media Guardian, Ofcom will look into the takeover bid for Sky and whether it is in the public interest for such a deal to take place. Cable has given Ofcom until the end of the year to comply its report examining the impact on the UK market if Sky and News Corp effectively merged. Once the report is submitted Cable can refer the deal to the Competition Commission.
Sky has previously history with the Competition Commission. When the broadcaster purchased 17% in ITV it was referred to the Competition Commission who ruled Sky had to sell the majority of its stake. However, News Corp have played down the chances of the deal being referred to the Commission and have stated they are “confident” it’s takeover of Sky will be allowed.
What do you think? Should News Corp be allowed to take over full control of Sky? Will it damage competition in the UK and give Murdoc too much power? Post your comments below.