Culture Secretary Lucy Frazer is considering further intervention after Ofcom raised concerns over the United Arab Emirates (UAE)-backed takeover of the Telegraph Media Group, the minister said on Tuesday.
The watchdog has warned that the proposed merger “may be expected to operate against the public interest” in relation to accurate news reporting and free expression.
Ms. Frazer said she’s “minded to” refer the deal for a Phase 2 probe in letters to the parties of the proposed merger.
The parties were given a week to respond, before the culture secretary will make a final decision.
Last year, Abu Dhabi-backed fund RedBird IMI reached a deal with previous Telegraph owners, the Barclay family, to take control of the newspaper group and fellow publication The Spectator, by paying off debts owed to their bank, Lloyds.
RedBird IMI is an investment fund majority-owned by Sheikh Mansour bin Zayed Al Nahyan, vice president of the UAE and owner of Manchester City Football Club.
Shortly after the deal was first announced, Ms. Frazer confirmed the government had triggered a Public Interest Intervention Notice to investigate its potential impact on press freedom.
In January, the culture secretary was forced to launch a fresh intervention after the proposed owner announced a new corporate structure for its takeover.
Ofcom and the Competition and Markets Authority (CMA) reported back to the culture secretary by March 11.
The CMA told Ms. Frazer that it doesn’t believe the proposed merger is likely to result in a “substantial lessening of competition” within the UK for goods or services.
“In particular, they consider that International Media Investments (IMI), a majority partner in RB Investco’s parent company, may have the incentive to influence [Telegraph Media Group] in a way that could potentially act against the public interest in the UK by influencing the accurate presentation of news and free expression of opinion in the Daily Telegraph and the Sunday Telegraph newspapers,” she wrote.
The minister said she will publish the watchdogs’ reports “in due course.”
She also confirmed that she’s “minded to refer this merger to a Phase 2 investigation on the grounds of the need for accurate presentation of news and free expression of opinion in newspapers.”
Before making a final decision on a referral, Ms. Frazer is required by law to give the parties the opportunity to make representations.
According to letters sent by Ms. Frazer dated March 18 and published on Tuesday, the parties were given until 9 a.m. on March 25 to respond.
The public interest probe is working in parallel with the government’s plan to ban foreign powers from controlling British newspaper and magazines.
The new rules are expected to be introduced as an amendment to the Digital Markets, Competition, and Consumers Bill at a third reading of the bill.
Speaking to ITV’s “Good Morning Britain” programme on Tuesday morning, Ms. Frazer rejected the claim that there is a “double standard” in Mr. Al Nahyan being allowed to own Manchester City, but not The Telegraph.
“We believe in this country in the free press. The media’s job is to hold power to account and it’s therefore inappropriate for the UK government to own a newspaper, and it’s therefore also inappropriate for a foreign state to own a newspaper,” she said.
“But we are very much open for business in terms of foreign investment in other spheres, like football.”
She added, “They’re totally different.”
