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Avaaz launches legal challenge of Ofcom’s greenlight for Murdochs’ Fox/Sky merger

Unprecedented case seeks to quash irrational ‘fit and proper’ decision


WEBWIRE

Global citizens movement Avaaz today launched an unprecedented public interest legal challenge to Britain’s broadcasting regulator, filing papers in court seeking a judicial review of Ofcom’s decision to clear the Murdochs’ proposed $12 billion Sky takeover.

June 2017 Ofcom found that if Sky was fully owned by Fox, it would still be ‘fit and proper’ to hold a UK broadcasting license.  Avaaz is seeking to have Ofcom’s decision quashed and a new investigation opened. The Murdochs’ bid for Sky TV already faces a wide-ranging 6-month investigation by the Competition and Markets Authority (CMA).

Alex Wilks, Avaaz Campaign Director, said: “Repeated, large-scale scandals in the Murdoch empire indicate that something is very rotten at the core of their businesses. Ofcom didn’t dig deep enough before declaring the Murdochs fit to own even more of our media.”

Grounds of Avaaz’s challenge:

Avaaz is challenging the fit and proper decision on four grounds.

  1. Ofcom cleared Fox News, despite the overwhelming evidence put before it by Avaaz and others, of the deliberate gross bias and fake news the channel routinely broadcasts.

  2. Ofcom made basic factual errors in assessing the sexual and racial harassment scandals at Fox and subsequently rewrote parts of its decision when Avaaz took the first step towards a legal challenge. Both the old and new versions show it failed to assess the efficacy of Fox’s corporate governance policies in stopping large-scale wrongdoing.

  3. In an earlier Fit and Proper decision in 2012, Ofcom severely criticised James Murdoch’s conduct at News Corporation and found Sky fit to retain a licence only after noting that he had stepped down as chair of Sky. In its 2017 report, Ofcom failed to explain why it was content with James Murdoch’s role as CEO of a merged Fox/Sky, including his assurances on corporate governance.

  4. Ofcom created an artificial “high threshold”, with no basis in law, that enabled the Murdochs’ corporate governance scandals to pass without serious challenge.

Ofcom also took assurances given by the Murdochs at face value, despite a history of broken promises. The latest examples of Murdoch double-speak are the return of Bill O’Reilly to Fox News this week as a guest, after he was sacked over sexual harassment allegations at the height of the Ofcom investigation, and claiming commercial considerations for the withdrawal of Fox News from the UK just days before the government’s CMA referral decision.

Background and timeline:

December 2016: 21st Century Fox launches bid to fully take over Sky Plc.

March 2017: UK Secretary of State for Culture, Media and Sport, Karen Bradley, refers the bid to Ofcom for a Phase 1 investigation on media plurality and broadcasting standards.

March 2017: Ofcom announces its own investigation of whether a merged Fox/Sky entity would be “fit and proper” to hold a broadcasting license in the UK.

June 2017: Ofcom publishes its Fit and Proper decision and recommends that the Secretary of State refers the bid for a full CMA probe on plurality, but not on broadcasting standards.  

August 2017: Karen Bradley writes to Ofcom requesting clarifications on how they addressed evidence presented by Avaaz on the Fox sex and race scandals and what those showed about Fox’s corporate governance policy.

14th September 2017: Karen Bradley refers the bid to the Competitions and Markets Authority for a full Phase 2 investigation on both public interest grounds of media plurality and broadcasting standards.

Avaaz is mounting this unprecedented challenge to Ofcom on its fit and proper regime, because only Ofcom has the power to decide who is fit to hold a UK broadcasting license.


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