BECTU Question Competition In BSkyB Takeover

An independent media trade union has commented that News Corp's attempts to head off criticism of its planned takeover of BSkyB fail to answer the serious questions about competition.

The statement is included in the BECTU's submission to Ofcom whose latest consultation into the planned takeover closed yesterday.

The submission prepared by Research Officer, Andy Egan said: "The sheer size and reach of the proposed merged company gives rise to clear concerns that it would be anti-competitive.”

The document includes 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", including cross-promotion of News Corp news titles and channels, and taking a dominant position in competing for rights.

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 urged 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.

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

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."

(BMcN/GK)