Leading article: The British media need to compete on a level playing field

Ofcom's inquiry must be more than merely a bureaucratic prelude to the deal being approved

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Let me be clear", Vince Cable told the Liberal Democrat conference last month, "the Government's agenda is not one of laissez-faire". Well so far, the Business Secretary has been as good as his word. Mr Cable has referred the £12bn bid by Rupert Murdoch's News Corporation to take full control of the satellite broadcaster, BSkyB, to the media regulator Ofcom. The inquiry will examine whether the deal will have a detrimental effect on "media plurality" in Britain.

The decision by Mr Cable to refer the bid was the right one. Given the widespread suspicion of a pre-election commitment from David Cameron to neuter the UK competition regulators in return for the support of Mr Murdoch's newspapers, a failure to examine the move from a public interest perspective would have been a justified scandal.

And this inquiry needs to be more than merely a bureaucratic prelude to the deal being approved. Fears that Rupert Murdoch wants to turn BSkyB's news channel, Sky News, into a fount of right-wing propaganda in the style of Fox News in the US somewhat miss the point. The law, thankfully, prevents licensed British broadcasters from engaging in that sort of editorialising. Moreover, as the largest shareholder in BSkyB already, Mr Murdoch effectively runs the broadcaster. If he wanted to create a UK Fox, he would surely have attempted it by now.

The danger is less of politicised broadcasting output than jeopardy to fair economic competition. News Corporation controls 37 per cent of the UK newspaper market, measured by circulation. The suspicion is that full ownership will enable News Corporation to use BSkyB's abundant revenue streams (the broadcaster has an annual turnover of £5.9bn) to cross-subsidise his newspapers heavily.

There is also the possibility that Mr Murdoch will attempt to "bundle" subscriptions for his newspapers (one of which is experimenting with charging for online access) with sales of BSkyB satellite packages. At a time when all print newspapers are coming to terms with a world in which an increasing number of readers consume their news online, that could confer on News Corporation a significant commercial opportunity not available to other media organisations.

It is, of course, impossible to say for sure whether News Corporation would use its new commercial clout in this way. But Ofcom must remember that Mr Murdoch has a record of acting in an anti-competitive manner. In the past, he has used News Corporation's deep pockets to run his UK newspapers at a hefty loss in order to crush competition. Mr Murdoch should not be given the benefit of the doubt by the regulators.

Ofcom will report back to Mr Cable by the end of next month. Then the Business Secretary must decide whether to refer the move to the Competition Commission which will decide whether the move is in the public interest. The European Commission is also investigating the bid.

This newspaper's interest in a level playing field for British media organisations is obvious. But a diverse media is firmly in the interests of the British public too. Democracy suffers when any private organisation or individual accumulates excessive economic or political influence. That is all the more true when that power base is in the media, whose function is the flow of information. The UK's media ecology is fragile. At the moment, Mr Murdoch's media empire is an immensely powerful force, but not yet a dominant one. If his latest move is allowed to proceed, the danger is that he will cross that line.

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