Avaaz Foundation, R (On the Application Of) v The Office Of Communications (Ofcom)s

A regulator may adopt a high threshold when deciding prospectively whether a broadcaster remains fit and proper to hold a licence, given the serious effect of revocation on broadcasting businesses, audiences and Article 10 ECHR rights. The threshold is a matter for the regulator’s judgment, subject to rationality review. In assessing future fitness, the regulator may consider past compliance, overseas conduct, corporate governance, leadership and existing compliance records, provided it evaluates the evidence fairly and rationally. The court will accord particular respect to predictive regulatory judgments within the regulator’s expertise. The statutory regime does not confer on individuals a right to access a broadcaster’s platform; plurality, impartiality and accuracy are protected through the applicable regulatory rules.

The Avaaz Foundation sought judicial review of Ofcom’s decision of 29 June 2017. Ofcom had concluded that allegations concerning Fox News and Fox’s corporate governance did not provide a sufficient basis to conclude that Sky would cease to be fit and proper to hold its broadcast licences if acquired by Fox.

The challenge alleged that Ofcom had applied an impermissibly high threshold, irrationally assessed Fox’s broadcasting conduct, inadequately assessed corporate governance failures, and failed to take account of its 2012 findings concerning James Murdoch. By the hearing, the proposed merger had become academic because the Secretary of State had made the relevant public interest decision and Fox confirmed that it would not challenge it. The court nevertheless addressed the grounds shortly.

1. The claim was dismissed. Although the proposed transaction had become academic, the court considered the grounds of challenge because they raised questions about Ofcom’s approach.
2. There was no statutory guidance on the height of the threshold for deciding whether a broadcaster was fit and proper. The issue therefore fell within Ofcom’s judgment, subject to rationality review. Ofcom was entitled to apply a high threshold because revocation would substantially interfere with broadcasting and the Article 10 ECHR rights of broadcasters and audiences. The prospective assessment after a merger could properly be conducted on the same basis.
3. The domestic regime does not give individuals a right to obtain access to a broadcaster’s platform. A level playing field is secured through rules concerning due impartiality, accuracy and media plurality. Ofcom had considered the competing freedom of expression interests and was entitled to conclude that there was no significant risk that a Fox-owned Sky would depart from UK broadcasting standards.
4. Ofcom’s assessment of Fox’s conduct was rational. It considered UK and overseas compliance records, the number and seriousness of breaches, representations concerning bias and inaccuracy, the absence of adequate UK compliance procedures, and Sky’s existing compliance record. The weight given to those matters was for Ofcom. The court would be especially slow to intervene in a predictive judgment involving substantial regulatory expertise, consistently with R (EE Ltd) v Ofcom [2016] EWHC 2134 (Admin).
5. Ofcom had adequately considered the serious allegations of sexual and racial misconduct and Fox’s response. It was entitled to conclude that the available evidence did not establish that senior executives knew of the alleged misconduct, or that revised corporate governance arrangements would fail to prevent or address future misconduct. Its ongoing duty to assess fitness and propriety allowed reconsideration if further evidence emerged.
6. Ofcom had also taken account of its 2012 findings concerning James Murdoch. It was required to assess the evidence available in 2017, including his role and the revised governance arrangements, rather than treat the earlier assessment as determinative. None of the four grounds was made out.