Leading article: An acquisition that must not proceed

Thursday 07 July 2011 00:00
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Ed Miliband yesterday called for News Corporation's attempted acquisition of BSkyB to be referred to the Competition Commission in response to the latest disturbing revelations in the phone hacking scandal.

In truth, the bid should always have been referred. This, after all, was the clear recommendation of the media regulator, Ofcom, in January. It was farcical that the Culture Secretary, Jeremy Hunt, offered News Corporation the opportunity to avoid this scrutiny through its pledge to sell off Sky News. It is hard to imagine any other firm being granted such a generous deal.

But the Labour leader is right to insist that the acquisition of BSkyB must be suspended. Ofcom has a legal responsibility to ensure that prospective owners of broadcasters such as BSkyB are "fit and proper". It is far from clear, at the moment, whether News Corporation qualifies. News International, the UK division of News Corporation, is the subject of a police inquiry. Employees of the firm, including its chief executive, are alleged to have hacked the phones of public figures and a murder victim. They also stand accused of making illegal payments to police officers and covering up evidence of wrongdoing. Ofcom cannot sanction this takeover, which would create the UK's largest media group, before it knows the outcome of the police investigation and the public inquiries promised by the Prime Minister yesterday.

David Cameron argued in Parliament that halting the acquisition process could open the Government to challenge in the courts by News Corporation. Yet that is most unlikely while the media firm is in its present convulsions. Moreover, it is far preferable to stop an acquisition early, rather than having to unstitch a deal at a later date. One way or another, this takeover must be frozen.

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