UK comms regulator Ofcom is facing judicial review over its ruling that Sky would remain ‘fit and proper’ to hold a UK broadcasting licence should the 21st Century Fox bid for the outstanding shares it does not already own be successful.
Hausfeld, the law firm representing advocacy group Avaaz, has issued a ‘letter before claim’ to Ofcom, a prerequisite for judicial review, highlighting what it describes as ‘fatal flaws’ of ‘law, fact and reasoning’ in the regulator’s June decision.
According to Alex Wilks, campaign director at Avaaz, Ofcom has made “mistake after mistake” in deciding to give the Murdochs a clean bill of health to take over more of UK media. “They need to reopen their investigation to regain credibility,” he asserted.
In making its decision, Avaaz contends that Ofcom made four serious errors as it looked at broadcasting standards in both Sky and the bidder, Murdoch’s 21C Fox, as well as what it describes as 21C Fox’s history of corporate governance failings.
Firstly, it failed to act based on exaggerated fears of the consequences of doing so. It set a high threshold for finding the Murdochs unfit and improper to hold a broadcasting licence on the basis of consequences for freedom of speech that would only occur if the takeover of Sky goes ahead.
Secondly, it made serious errors in how it assessed Fox’s compliance with the UK broadcasting code, basing its decision on the number of complaints received despite Fox’s tiny audience in the UK, and ignoring clear evidence of ‘gross distortions and blatant inaccuracies’. When it emerged that Fox lacked the necessary broadcasting standards policy, Ofcom accepted a hastily thrown-together policy, which was breached on its very first day of operation.
Thirdly, Ofcom also got basic facts wrong about and drew the wrong conclusions from the serious sexual and racial harassment misconduct unfolding at Fox News, wrongly stating that ‘almost all’ of the misconduct occurred before 2012, and accepting Murdoch assurances that the board were not aware of this misconduct. Internal processes introduced by Fox to tackle governance issues in 2012 should have ensured the board were aware, suggesting they either had knowledge or these processes spectacularly failed to work.
Finally, Ofcom ignored the role James Murdoch would play in the event of a takeover as CEO of Fox, despite having been highly critical of his conduct in a previous decision in 2012, and the fact that Culture Minister Karen Bradley specifically asked Ofcom to report on the implications of James’s position as CEO of Fox on the bid.
Ofcom now has 14 days to respond to the letter, after which formal judicial review proceedings can begin. If the judicial review finds against Ofcom, the regulator will have to revisit the decision and ensure it is taken lawfully. The letter comes as Ofcom reassesses the Fox bid after being asked to revisit its decisions by Culture Minister Karen Bradley. More than 70,000 Avaaz members across Britain have joined the campaign to stop the Fox takeover of Sky.
Avaaz describes itself on its site: “Avaaz—meaning “voice” in several European, Middle Eastern and Asian languages—launched in 2007 with a simple democratic mission: organize citizens of all nations to close the gap between the world we have and the world most people everywhere want.”