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BSkyB takeover: undertakings fail to answer competition questions

The statement is included in the union's submission to Ofcom whose latest consultation into the planned takeover closes at midday on 21 March .

Read BECTU's submission in full

"The sheer size and reach of the proposed merged company gives rise to clear concerns that it would be anti-competitive," says the submission prepared by research officer, Andy Egan.

The document cites the following facts:

• the merged company would be the largest private media company ever seen in the UK;
• an enlarged News Corp, with an expected turnover of £9bn within a few years, would have almost double the revenue of the BBC. Its size and scale would predominate over every other media organisation in the UK.
• the new combine would reach across all significant media platforms: television, radio, newspapers, online and ISP - including a customer base of 10m television subscribers and 40 per cent share of the newspaper market.

The union has previously highlighted its concerns about the dominant position which the takeover would grant to News Corp and the destabilising effect this would have on the UK media market and its operators.

This latest statement from BECTU states that a bigger News Corp would have "opportunities on a scale unavailable to any competitor". For example:

• to cross-promote News Corp news titles and channels
• to bundle news products with other media services
• to develop integrated news products for convergent devices and media
• to win wholesale news contracts
• to distort the advertising market with cross-platform deals
• to take a dominant position in competing for rights.

Procedural irregularities

BECTU also places on record its "severe reservations" about the procedure followed by the secretary of state, Jeremy Hunt, who despite a previous commitment to take the advice of the regulator in referring the planned takeover to the Competition Commission, opted instead to grant News Corp the privilege of "a series of private discussions with regulators, without any public scrutiny leading to the reluctant and unconvincing undertakings" announced in early March.

BECTU believes that News Corp's promise to guarantee the independence of Sky News in a spun off company is not meaningful given the news provider's commercial dependence on News Corp/BSkyB for 85 per cent of its revenue and 25 per cent of its costs.

BECTU also urges Ofcom to scrutinise News Corp's promise of editorial independence for Sky News. News Corp made similar undertakings in response to opposition to the takeover of The Times and Sunday Times in 1981 and to the takeover of the Wall Street Journal in 2007.

"Post-takeover none of these publications are considered in any way editorially-independent of the interests of News Corp," says BECTU.

Conclusions

BECTU calls upon the secretary of state to refer the proposed merger to the Competition Commission rather than "abjectly accepting this inadequate settlement."

The union also calls upon the government "to institute a broader review of the statutory framework governing the public interest in media pluralism."

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