U.K. Regulator Says Fox News Violated Broadcast Standards

(Bloomberg) -- Rupert Murdoch’s Fox News was faulted by U.K. regulators for biased reporting, raising criticism that comes at an inopportune time for the media billionaire, whose attempt to expand his empire with the purchase of Britain’s Sky Plc is still under review.

Two of Fox News’s flagship public-affairs programs, “Hannity” and “Tucker Carlson Tonight,” violated standards for “due impartiality” when shown in the U.K. this year, communications regulator Ofcom said in a decision on Monday. The separate programs failed to provide an adequate range of viewpoints, according to Ofcom.

The decision tripped shares of Sky, whose 11.7 billion-pound ($15.3-billion) takeover by Murdoch’s 21st Century Fox Inc. is awaiting approval by U.K. regulators. The stock fell as much as 5.4 percent, the most since the U.K.’s decision to leave the European Union in June 2016, before recovering some. The shares were down less than 1 percent to 941 pence at 2:35 p.m. in London, about a 12 percent discount to the offer price.

While Fox News stopped broadcasting in the U.K. in August and surrendered its license to Ofcom last week, the rebuke by regulators could affect how its parent company is viewed by authorities deciding whether to approve the takeover of Sky. The review has dragged on after the government referred the deal to the competition regulator for additional scrutiny and Fox doesn’t expect it to close before mid-2018.

A spokesman for Fox declined to comment.

Ofcom said the “Hannity” program on Jan. 31, covering President Donald Trump’s travel restrictions from seven majority-Muslim countries, was skewed toward coverage that was supportive of the order. Alternative opinions put forward during the discussion were dismissed by the presenter, Ofcom said.

On May 25, the “Tucker Carlson Tonight” installment discussing the Manchester, U.K., terrorist attack, didn’t “reflect significant alternative viewpoints, and treat these with due weight,” even as it criticized the U.K. government and authorities, Ofcom said.

Opponents of the Sky takeover including former Labor leader Ed Miliband had pushed for authorities to consider Fox’s adherence broadcast standards in the additional review by the Competition & Markets Authority ordered up by Culture Secretary Karen Bradley, who heeded those requests in her September referral, against Ofcom’s advice.

Fox cited commercial reasons for deciding not to continue showing Fox News in the U.K., where it said there were only a few thousand viewers a day. Political advocacy group Avaaz, an opponent of the takeover, called it a “desperate gamble” to persuade the government the Murdochs are fit to take over Sky.

Ofcom on Monday said that in reaching its decision on the standards violations, it took into account the fact that Fox News is a U.S. channel directed at U.S. audiences, and that people who were watching it in the U.K. were aware of that and would have had different expectations. It had received one complaint for each of the programs.

Fox News won’t be sanctioned for the breaches, which Ofcom can normally levy if violations are serious enough. Ofcom is unable to fine Fox News in these cases, given it no longer holds a broadcast license.

In Ofcom’s earlier review of the Sky takeover with regards to whether Sky would continue to be a “fit and proper” holder of a broadcast license, it noted that neither Fox nor Sky had breached their licenses in a way that gave rise to a penalty.

In June, Ofcom found Sky would continue to be a fit and proper holder of a U.K. broadcast license under full Fox ownership. It also found that while there were some concerns about Fox’s adherence to broadcast standards, they weren’t sufficient to warrant a referral to the CMA.

To contact the reporter on this story: Rebecca Penty in London at rpenty@bloomberg.net.

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Kim Robert McLaughlin, Ville Heiskanen

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