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Group Opposed to Fox-Sky Takeover Files Legal Challenge Against British Regulator

An activist group opposed to 21st Century Fox’s bid to take over Sky has mounted a legal challenge seeking to nullify decisions made by British regulator Ofcom. Avaaz filed legal documents at the British High Court of Justice on Friday arguing that a new and wider investigation should be conducted into whether Fox would be a “fit and proper” owner of the pan-European pay-TV service.

Avaaz is seeking a judicial review of Ofcom’s conclusion, submitted in a report to the British government in June, that it could see no reason to reject the $15-billion takeover deal on the grounds that the Murdochs would not be a “fit and proper” owner of Sky. Fox, which already owns 39.1% of Sky, is seeking to acquire the remaining 60.9%.

“Repeated, large-scale scandals in the Murdoch empire indicate that something is very rotten at the core of their businesses,” Avaaz campaign director Alex Wilks said in a statement. “Ofcom didn’t dig deep enough before declaring the Murdochs fit to own even more of our media.”

The group had declared its intent to seek legal intervention in an Aug. 21 letter to Ofcom, which asked the regulator to withdraw its June report. The letter alleged that factual errors had been made in Ofcom’s assessment of sexual and racial harassment scandals at Fox, and that Ofcom’s test of what constitutes “fit and proper” was too narrow. The letter was submitted four days prior to Ofcom filing a second report to British Culture Secretary Karen Bradley.

Earlier this month, Bradley referred the takeover bid to the U.K. Competitions and Market Authority for a fuller investigation on “media plurality and genuine commitment to broadcasting standards grounds.” The inquiry is expected to take about six months.

If Avaaz is successful with the complaint filed Friday, the court could require Ofcom to start over with its investigation into the takeover bid and to carry out a more detailed review, looking at all parts of the Fox business. That could cause further delays for Fox, which is obliged by the takeover deal to pay Sky an additional £200 million ($268 million) if regulatory scrutiny is not completed by Aug. 15, 2018. Avaaz hopes the court will reach its decision before the end of the year.

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