Update on Proposed Fox-Sky Merger Process

Lord McNally Excerpts

Tuesday 12th September 2017 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, I welcome the Statement that the Secretary of State is minded to refer the bid to the CMA on broadcasting standards grounds as well as those of media plurality. In its first report, Ofcom said there were no broadcasting standards concerned that may justify a reference. It has now admitted that there are “non-fanciful” concerns. On that basis, the Secretary of State had to refer the bid, she has done so, and we on these Benches certainly welcome that.

The Murdochs have a long history of regulatory non-compliance and corporate governance failure, at both 21st Century Fox and News Corporation. Just last week, News Group settled in 17 cases relating to allegations of criminality at the Sun, ensuring that James Murdoch will not have to appear in court later this year.

The Secretary of State has done her job and now, as the noble and learned Lord, Lord Keen, said, the CMA must do its job. However, we need to be assured that it will be a comprehensive look at the corporate governance issues. The Secretary of State has said—and the noble and learned Lord repeated this—that the issue is a matter of evidence. One way to gather that properly, and to inform the CMA, would be to commence the second part of the Leveson inquiry. I hope the noble and learned Lord will be able to reassure the House on that matter.

When previous Statements have been made to the House on this issue, I have sought reassurance from the noble and learned Lord in relation to data. How data are mined, used and abused in terms of media plurality is particularly an issue in relation to Fox News. I would be grateful if the noble and learned Lord could repeat what he said to us before—that the issues of,

“data-scraping or data accumulation … are matters that the Competition and Markets Authority will take into account in arriving at any decision”.—[Official Report, 20/7/17; col. 1749.]

I hope the noble and learned Lord can reassure us on that.

[Lord McNally (LD)]

My Lords, like the noble Lord, Lord Collins, I welcome this Statement and I am grateful to the Minister and the Secretary of State for the thorough way that she has kept those of us interested briefed as she has come to these decisions. I also welcome the revised advice from Ofcom. I was part of the committee that created Ofcom and have always been proud of the way it has developed as a regulator. I have to say that its first advice on these matters came close to being equivalent to what the Premiership seems to think of as fit and proper to run a football club. The revised advice gives some credibility back to Ofcom in these matters, and it should be grateful to the Secretary of State.

I am a little worried about the sudden appearance of the term, “non-fanciful”. I am not sure that the Minister, with his long and distinguished legal career, would be able to tell me how “non-fanciful” is weighed in matters of judgment. As the noble Lord, Lord Collins, asked, would worries about data mining and abuse of data be dismissed as “fanciful”? When we bandy terms such as non-fanciful about, we should remember that most of the accusations made about News International in the past 10 years were initially dismissed as fanciful—as being made up by enemies of the Murdochs—but then turned out to be true. I am not so sure that “fanciful” and “non-fanciful” should be used in the work ahead.

In taking its decisions, the review should look at the threat to the UK media industry. Our media in all their aspects are among the least protected of national media from predatory attack. As the value of the pound falls, there is good reason for being careful about the message that we send out about our determination to defend the integrity of our media.

I associate myself also with the call made by the noble Lord, Lord Collins, for the second part of Leveson to go ahead.

As a Fox subscriber, I was interested to learn that Sky thought that Fox News was so little to the taste of the British viewer that it has taken it off its platform, whereas it has left on it the Iranian and Russian news channels.

[Lord Keen of Elie]

My Lords, I begin by responding to the point raised by the noble Lord, Lord McNally, on what is “fanciful” or not, because it goes to the heart of the decision-making process addressed by the Secretary of State. It is a term with a legal basis that is linked to the statutory test for a phase 2 referral in public interest cases. I mention in passing the Court of Appeal decision in the case of the Office of Fair Trading v IBA Health. I shall not elaborate on the dicta in that decision, save to mention that there is a legal basis.

The Secretary of State must believe that the merger operates, or may be expected to operate, against the public interest. In her coming to her view that the evidence meets the test of “non-fanciful”, it should be noticed that that is a relatively low threshold. It is not necessary that the Secretary of State should be satisfied on the balance of probabilities or beyond reasonable doubt; the belief must be reasonably and objectively justified by the facts. In other words, there must be an evidential basis for the Secretary of State’s concern, but the concern itself does not need to be proven. That is essentially the approach that underpins the Secretary of State’s decision-making process here.

On broadcasting standards, I emphasise to the noble Lord, Lord Collins, that we are dealing at this stage with the Secretary of State’s “minded to” decision. It is not a final decision. There is now a 10-day process, pursuant to Section 104 of the Act, whereby the parties can respond and make submissions before any final decision is arrived at.

As regards evidence and data in the context of media plurality, it is premature for me to elaborate on what has already been said on these matters because a final decision has not been made on the second ground of broadcasting standards. If and when such a decision is made, there will in any event be a reference to the CMA, and it will be for the CMA to discharge its statutory functions. It would not be appropriate for me at this stage to anticipate how the CMA should go about its own statutory task. That would be to intrude into its territory. With all due respect, I hope the noble Lord accepts that it would not be appropriate for us to tread on that lawn, as it were.

On the question of Leveson 2, we have clearly progressed a long way since the first part of the Leveson inquiry was set up over six years ago. We have witnessed the completion of three detailed police investigations, extensive reforms to practices involving the police and some significant changes to press regulation. We have put this matter out for consultation and are considering the responses to it. We will publish a response in due course.