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August 21, 2017


Ofcom facing judicial review over ruling that Murdoch ‘fit and proper’

*Letter before claim lays out ‘fatal flaws’ of ‘law, fact and reasoning’ in decision*

Ofcom is facing judicial review over its ruling that Sky would remain ‘fit and proper’ to hold a UK broadcasting license under full Murdoch ownership.

Hausfeld, solicitors representing Avaaz, issued a ‘letter before claim’ to Ofcom, a prerequisite for judicial review, highlighting ‘fatal flaws’ of ‘law, fact and reasoning’ in the regulator’s June decision.

Alex Wilks, campaign director at Avaaz, said: "Ofcom’s made mistake after mistake in deciding to give the Murdochs a clean bill of health to take over more of our media. They need to reopen their investigation to regain credibility.” 

In making its decision, Ofcom made four serious errors as it looked at broadcasting standards in both Sky and the bidder, Murdoch's 21C Fox, as well as 21C Fox's history of corporate governance failings.

Firstly, it failed to act based on exaggerated fears of the consequences of doing so. It set a high threshold for finding the Murdochs unfit and improper to hold a broadcasting licence on the basis of consequences for freedom of speech that would only occur if the takeover of Sky goes ahead.

Secondly, it made serious errors in how it assessed Fox’s compliance with the UK broadcasting code, basing its decision on the number of complaints received despite Fox’s tiny audience in the UK, and ignoring clear evidence of ‘gross distortions and blatant inaccuracies’. When it emerged that Fox lacked the necessary broadcasting standards policy, Ofcom accepted a hastily thrown together policy, which was breached on its very first day of operation.

Thirdly, OFCOM also got basic facts wrong about and drew the wrong conclusions from the serious sexual and racial harassment misconduct unfolding at Fox News, wrongly stating that ‘almost all’ of the misconduct occurred before 2012, and accepting Murdoch assurances that the board were not aware of this misconduct. Internal processes introduced by Fox to tackle governance issues in 2012 should have ensured the board were aware, suggesting they either had knowledge or these processes spectacularly failed to work.

Finally, Ofcom ignored the role James Murdoch would play in the event of a takeover as CEO of Fox, despite having been highly critical of his conduct in a previous decision in 2012, and the fact that Culture Minister Karen Bradley specifically asked Ofcom to report on the implications of James’ position as CEO of Fox on the bid.

OFCOM now have 14 days to respond to the letter, after which formal judicial review proceedings can begin. If the judicial review finds against OFCOM, they will have to revisit the decision and ensure it is taken lawfully. The letter comes as OFCOM reassesses the Murdoch bid after being asked to revisit their decisions by Culture Minister Karen Bradley. More than 70,000 Avaaz members across Britain have joined the campaign to stop Murdoch’s takeover of Sky.


Ofcom's 2017 fit and proper decision can be found here.

Avaaz’s Letter Before Claim can be found here.


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Where Murdoch's Sky Bid Stands

On July 29, the UK's Culture Secretary, Karen Bradley, announced that she's “minded to” refer the Murdoch's takeover bid of Sky for a deeper phase two investigation by the Competition and Markets Authority (CMA) on concerns around media plurality and political influence. She rejected the Murdochs' concessions to allay plurality concerns, a decision Avaaz supports.

Bradley also said she is “minded not to” refer the bid on broadcasting standards grounds, which Avaaz and others have severely criticised. She based that decision on Ofcom’s report from June that declared Fox News committed to UK standards of accuracy and impartiality. In tandem, Ofcom also cleared Fox in its fit and proper report.

Earlier this month, an explosive new lawsuit against 21st Century Fox alleged that Fox News colluded with the White House to concoct a fake news story about slain DNC worker Seth Rich. The story, which suggested Rich, not Russia, was the source of DNC emails released by Wikileaks in the 2016 presidential race, dominated segments across four major shows just as Fox officials were sitting in London reassuring Ofcom that it was reforming its corporate governance standards.

Fox has now been exposed in several major corporate governance failures in the past year, including the high-level cover up of sexual and racial harassment, and now allegedly colluding with the Trump administration to release a false story that helped the government divert attention from Russia investigations.

On 8th August Karen Bradley announced she had asked Ofcom to further examine the Murdochs and their adherence to broadcasting standards, and report back by August 25. Bradley is expected to announce the grounds on which to refer the bid to the Competition and Markets Authority (CMA) in early September.

Given the Seth Rich scandal, and other Murdoch scandals ignored by Ofcom, Avaaz believes Ofcom should reopen its fit and proper investigation and the bid should be referred to the CMA on both plurality and broadcasting standards grounds.