Public interest test on the proposed acquisition of British Sky Broadcasting Group plc by News Corporation

On 3 November 2010 News Corporation (“News Corp”) notified the European Commission of its intention to acquire the shares in British Sky Broadcasting Group plc (“Sky”) it does not already own (throughout the report we refer to this as the “proposed acquisition” or “the transaction”). This would increase its holding from approximately 39.1% to 100%.

On 4 November the Secretary of State for Business, Innovation and Skills issued a European intervention notice in relation to the proposed acquisition. The notice specified the public interest consideration in section 58 of the Enterprise Act 2002 ("the Act“) concerned with the sufficiency of plurality of persons with control of media enterprises. This is: “the need, in relation to every different audience in the United Kingdom or in a particular area or locality of the United Kingdom, for there to be a sufficient plurality of persons with control of the media enterprises serving that audience”. ¹

He asked Ofcom to investigate and to report to him by 31 December 2010 providing advice and recommendations on the specified public interest consideration, which may be relevant to the Secretary of State“s decision on whether to refer the case to the Competition Commission.

1. There has only been one previous instance of an intervention notice being issued in relation to this public interest consideration involving Sky“s proposed acquisition of 17.5% of ITV.