Culture Secretary Karen Bradley says she is “minded to” refer Fox’s takeover of Sky to UK competition authorities.
Regulator Ofcom looked into the plan to decide if the deal was in the public interest, especially around media plurality and broadcasting standards.
Ofcom said it risked the Murdoch family having “increased influence” over the UK’s news agenda and political process.
Fox owns 39% of Sky, but wants to buy the rest, and assume total control of the broadcaster.
The deal has been cleared by European Commission competition authorities.
This a quick guide to the issues involved:
Why is the deal controversial?
Rupert Murdoch will control both 21st Century Fox and Sky while also owning The Times, the Sunday Times and The Sun newspapers.
Opponents say this will give him too much power in the UK media.
Fox has also been hit by sexual harassment scandals at its flagship Fox News channel in the US. Some of the victims have given evidence to Ofcom.
Why is Mr Murdoch keen on the takeover?
Rupert Murdoch is willing to spend £11.7bn on the deal – an indication of how much he wants it to happen.
If the deal goes ahead, 21st Century Fox would gain access to Sky’s 22 million customers in Europe. As well as the UK and Ireland, Sky owns similar satellite pay-TV operations in Germany and Italy.
It will also have full control over how it is run, rather than have to listen to independent shareholders.
On top of that, the company is highly “cash generative”, money that could be freely channelled to help expand the Murdoch empire elsewhere.
Fox argues that money it invests will benefit the UK’s creative industries. In recent years Sky has commissioned an increased amount of original UK programming, such as the dramas Fortitude and Guerrilla, rather than rely entirely on US imports.
If the deal is successful, does this mean Sky News will become a UK version of Fox News?
In short, no.
Fox News is known for its right-wing stance, with contributors such as former Republican presidential hopeful Newt Gingrich and vice-presidential candidate Sarah Palin.
It is also supportive of President Trump.
The UK has rules that ensure broadcasters must pay attention to due impartiality so Sky would be prevented from taking a similar route to Fox.
Hasn’t this deal been tried before?
Fox first tried to buy Sky in 2011 but the deal fell apart after revelations about the hacking of murdered schoolgirl Milly Dowler’s phone by the Murdoch-owned News of the World.
Then, as now, there was opposition from Labour and the Liberal Democrats as well as other media groups.
After the 2011 debacle, Mr Murdoch split the broadcasting and film empire – Fox – away from his newspaper interests – News Corp.
What happens now?
Ms Bradley will have received the report from Ofcom on the broadcasting standards and plurality implications and will announce whether she will refer the deal to the Competition and Markets Authority.
Source: BBC News