News Corp bid for BSkyB moves to Competition Commission amid more allegations of phone hacking

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Image: Tom Solari/techgeek.com.au

More allegations of phone hacking have struck another newspaper owned by News International, the UK subsidiary of News Corporation, as the its bid to control the largest UK satellite television provider BSkyB is heading to the UK’s Competition Commission.

The move to let the Competition Commission decide on the final merger was in due part of News International withdrawing its move to make Sky News – the news gathering arm of BSkyB – an independent company outside the reach of News Corporation. It made those undertakings in January to allow the deal to get the go ahead.

News Corporation already owns 39 percent of BSkyB, but seeks to purchase the remaining shares. The deal could allow it to rival the BBC as Britain’s largest media company.

Culture Secretary, Jeremy Hunt, has said that the events of the last minutes have “dramatically changed”, with more allegations that News of the World – recently shut down – has hacked more members of the royal family than what was reported back in 2006. It also comes with more allegations from the BBC said that emails handed to Scotland Yark contained evidence had paid bribes to obtain private numbers of the royal household.

In addition, News International could see another newspaper, the Sunday Times, affected by the scandal as reports from a BBC investigation has found that the paper tried to obtain personal details of the former Prime Minister Gordon Brown – such as medial records, financial information and voicemails. The information could also have an impact on the deal for BSkyB.

The hacking scandal has been around in the UK press since 2006, but picked up pace in 2009. However, the revelations last week of the News of the World of hacking victims of crime, terrorist attacks and even a murdered schoolchild was seen as the last straw with advertisers pulled out, with News International announcing that last week, the paper was going to shut down last Sunday.

The UK Government has announced two public inquiry on the ethics of the media in relations on the phone hacking scandal.

However, there has now been a large group opposed to the deal between News Corp and BSkyB. The Opposition Leader, Ed Miliband, has called for Rupert Murdoch to drop his bid for BSkyB.

The Competition Commission is an independent body that conducts inquires into mergers to ensure healthy competition between companies in the UK. The body does have powers to block a merger, unless the Government chooses to intervene – but the likelihood of them intervening is little to none.

In addition, News Corporation is also seeking to have a near-monopoly in pay television in Australia. It is a part owner of Foxtel, and Foxtel has now confirmed that it will tying to buy Austar for a deal worth $2 billion.