Out-Law / Your Daily Need-To-Know

The Culture Secretary has asked Ofcom and the Office of Fair Trading (OFT) if the closure of the News of the World (NotW) newspaper has changed their view of whether its owner should be allowed to take over BSkyB, according to media reports.

Jeremy Hunt has asked the watchdogs if the closure of the News of the World (NotW), which is owned by News Corporation, had changed their opinion of the bid, according to the BBC.

The NotW was published for the final time on Sunday after bosses at News International, the UK arm of News Corporation, announced that the paper would close last week. The move came amidst allegations that editors and journalists at the paper had commissioned a private investigator to hack into the voicemail messages of thousands of individuals.

Ofcom, the UK's media regulator, and the OFT, which has been advising the Government on how the proposed takeover would impact on consumers' choice, recently backed proposed conditions that News Corporation and the Government had drawn up to allow the takeover to proceed.

In December Ofcom announced concerns over the impact that the planned takeover would have on media plurality, but last month it said the proposed undertakings had allayed those concerns. Hunt has now asked Ofcom, and the OFT, for further advice on the takeover.

"I would be grateful if you could indicate whether [the closure of the NotW] (and/or the events surrounding it) gives you any additional concerns in respect of plurality over and above those raised in your initial report to me on this matter received on 31 December 2010," Hunt said in a letter to the two watchdogs, according to a report by the BBC.

In the letter Hunt asked if their advice on the "credibility, sustainability or practicalities of the undertakings offered by News Corporation", had changed, according to the BBC.

A spokeswoman for the OFT told OUT-LAW that the organisation was expecting the letter but had not yet received it.

Under provisions within the Broadcasting Act, Ofcom must decide whether News Corporation is a 'fit and proper' organisation to own BSkyB. It did not respond to requests for a comment on Hunt's letter.

The proposed conditions of News Corporation's takeover were open to public consultation until Thursday last week. The undertakings detailed measures News Corporation must take in relation to BSkyB's news channel, Sky News, which it will spin off from News Corporation under the deal.

The undertakings build on original plans the Government agreed with News Corporation and consulted on in March. They force the company to separate Sky News from BSkyB in order to complete a takeover.

The revised undertakings include plans for an independent director to be present at Sky News board meetings when editorial decisions are being taken. Sky News will also have to be promoted across other Sky channels, the revised undertakings said.

Hunt said he altered the undertakings in order to "further strengthen" the conditions based on 40,000 responses to the original proposals.

The Department for Culture, Media and Sport (DCMS) said that it was not expecting to make a decision on the takeover bid for "some time" in order to wade through the volume of responses to its latest consultation. DCMS received 135,000 views on the revised undertakings, according to media reports.

Hunt could decide to refer the takeover bid for evaluation by the Competition Commission. The Commission could consider whether a prospective takeover would leave competition in the UK media market in a healthy state and whether it would benefit the organisations, customers and the economy.

Last week Prime Minister David Cameron announced there would be a full public inquiry into the phone hacking allegations. A second inquiry into how the press is regulated will also take place, Cameron said.

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