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Rupert Murdoch has had his bid to take over UK satcaster BSkyB referred to the Competition Commission, and has withdrawn his undertaking to spin off Sky News.
Culture and media secretary Jeremy Hunt has referred the bid to the Commission following News Corp’s announcement this afternoon that it would be “withdrawing its proposed undertakings” regarding Sky News.
Anticipating Hunt’s response, News Corp said it was “ready to engage with the Competition Commission on substance.”
News Corp, it added, “continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the UK.”
Hunt told the House of Commons the bid would be referred to the Commission immediately, and the process is expected to take at least six months.
The move came after Ed Milliband, leader of the opposition Labour Party, today repeated his demand for the Commission to be involved. He said the current process relied too heavily on assurances given by News Corp, which he said could no longer be trusted in the wake of the News of the World phone-hacking row.
Deputy prime minister Nick Clegg called on Murdoch to abandon the move altogether in the face of heavy public criticism of News Corp and News International.
News Corp wants to buy the 60.9% of the UK satcaster that it does not already own, and it originally sought to allay fears about media plurality by agreeing to offload the Sky News service.
The crisis shows no sign of abating for Murdoch, who is now being sued by News Corp shareholders for the poor handling of the affair.
Amalgamated Bank of New York and several US pension funds took legal action against News Corp earlier this year over its US$675m takeover of Elizabeth Murdoch’s Shine prodco – a deal they said amounted to nepotism.
The court papers have now been updated to cover what the claimants say was a failure to effectively investigate and address the wrongdoing by employees of the News of the World and News International when it first came to light six years ago. This, they say, is part of a broader pattern of lax corporate governance and self-dealing at News Corp.
