A letter from the Department for Digital, Culture, Media & Sport (DCMS) to DMGT has confirmed that the culture secretary, Nicky Morgan, has asked government watchdogs to investigate whether the deal could lead to a “substantial lessening of competition”.
DCMS released a public interest intervention notice on Wednesday (22 January) to confirm that Morgan felt there were “reasonable grounds” for the investigation following a preliminary ‘minded to’ letter that was published earlier this month.
The letter to DMGT indicates that Morgan has instigated the investigation on the grounds of “the need for, to the extent that it is reasonable and practicable, a sufficient plurality of views in newspapers in each market for newspapers in the United Kingdom.”
“We note DMGT’s representations made in relation to editorial independence and media plurality,” the letter reads. “While the secretary of state considers that these representations raise matters that could be usefully considered by Ofcom, nothing in them leads her to dismiss her concerns as set out in the ‘minded to’ letter.
“In particular, we note the representations made that editors at DMGT are able to make independent editorial judgements, without interference from the proprietor, and that there is a commercial incentive for retaining the editorial position of the i.
“We note your concern that a delay caused by an Ofcom report will impede DMGT in making financial investments at the i. The commercial impact of an intervention is not something that can be taken into account under the media merger regime.”
The CMA and Ofcom are required now to investigate the matter and report by midnight at the end of Friday 13 March.
DMGT, which owns the Daily Mail, bought the i from JPI Media in November, at which time chair Lord Rothermere insisted that his company was “committed to preserving” the i’s “distinctive, high-quality and politically independent editorial style”.
JPI continues to consider the sale of its more-than 200 regional titles to National World, a takeover vehicle recently established by newspaper former Mirror Group chief executive David Montgomery, as the latter begins a planned build-and-buy acquisition spree.