Rupert Murdoch’s bid for a Sky takeover with media empire 21st Century Fox has been referred to the competition and markets authority after Ofcom raised concerns about media plurality should the power be put in the hands of too few.
The decision was made by culture secretary Karen Bradley, who said she is “minded to” to refer the bid to the competition watchdog after receiving a report from regulator Ofcom that found the deal risked the Murdoch family having "increased influence" over the UK's news agenda and the political process.
"On the basis of Ofcom's assessment, I confirm that I am minded to refer to a phase two investigation on the grounds of media plurality," she said.
The parties involved can make representations to the culture secretary until Friday 14 July, when she will make a further decision about referring the deal to the Competition and Markets Authority.
The deal, worth £11.7bn, was approved by European Commission competition authorities in April.
While it’s facing further scrutiny in the UK, Tom Watson, the shadow culture secretary, predicted the government would eventually allow the merger to go ahead as he accused the Conservatives of forming "an implicit bargain" with the Murdoch family.
Ofcom said it had no concerns about Fox's genuine commitment to broadcasting standards, which Bradley said was a second test for approving the deal.
"While there are strong feelings among both supporters and opponents of this merger, in this quasi-judicial process, my decisions can only be influenced by facts, not opinions – and by the quality of evidence, not who shouts the loudest," she said.
Fox already holds a 39% stake in the British broadcaster and telecommunications company. Four years ago News Corp – the name for Murdoch's empire before it was split and 21st Century Fox formed – attempted an acquisition of Sky.
However, this was thwarted by political opposition amid the phone hacking scandal at its British newspapers, leading to the closure of News of the World.
Shares in Sky were 3.2% higher at 988p in afternoon trading, valuing the company at almost £17bn.