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BSkyB merger referral reprieve

January 25, 2011

Confirming Ofcom’s recommendation of a referral, Hunt said that in accordance with his duties to meet relevant parties, he met with News Corporation on 6 January to set out the process that he would follow and briefly explain Ofcom’s conclusions. “Having informed them of the process I then wrote to News Corporation and BSkyB on 7 January enclosing a copy of Ofcom’s Report. In this letter I explained that I was minded to refer the case to the Competition Commission but that I would receive written, and if necessary oral, representations from them if they wanted to challenge my thinking,” he said. “On 10 January I met with Ofcom to seek clarification on a number of aspects of their report.”

BSkyB and News Corporation provided written representations challenging elements of Ofcom’s report on 13th and 14th January respectively. After considering these responses Hunt met again with News Corporation on 20th January to hear representations on the issues they highlighted.

“As a result of these meetings and my consideration of the Ofcom report and subsequent submissions from the parties involved I still intend to refer the merger to the Competition Commission. On the evidence available, I consider that it may be the case that the merger may operate against the public interest in media plurality,” he said.

Hunt admitted, however,that before doing so, it was right that he consider any undertakings in lieu offered by any merging party which have the potential to prevent or otherwise mitigate the potential threats to media plurality identified in the Ofcom report.

“News Corporation says that it wishes me to consider undertakings in lieu which it contends could sufficiently alleviate the concerns I have such that I should accept the undertakings instead of making a reference. It is appropriate for me to consider such undertakings. In considering whether to accept undertakings in lieu, I will ask the Office of Fair Trading, under section 93 of the Enterprise Act 2002 as an expert public body with experience in negotiating undertakings in lieu, to be involved in the process from this stage. I will also ask Ofcom under section 106B for advice whether undertakings in lieu address the potential impact on media plurality,” he said.

“If this process produces undertakings in lieu which I believe will prevent or otherwise mitigate the merger from having effects adverse to the public interest, and which I propose to accept, I will then publish the undertakings in lieu and (as required under the Act) begin a formal 15 day consultation period during which time all interested parties will be able to express their views.

“It is in the nature of this process that I cannot give clear dates for each step as we move forward. My main concern is not to work to an arbitrary timetable but to ensure that I reach my decision in a fair and even-handed way which is transparent and ensures that all concerns are properly considered.”

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