Financial and Business|

News Corporation makes U-turn on BSkyB Takeover

News Corp, News International, New of the World & Sky LogosAs prime minister David Cameron revealed details of an independent inquiry into the unveiled phone hacking at News of the World, News Corporation – the US group that owns the tabloid – dropped its takeover bid for British Sky Broadcasting Group (BSkyB). The media company, which is headed by media mogul Rupert Murdoch, also owns the Times and the Sun, along with 39% of BSkyB. The company says that it’s clear that it’s too hard to continue with the buyout in the current climate.

There has been an overwhelming political condemnation on News Corporation due to the phone hacking scandal revealed last week. Labour leader Ed Miliband says that the withdrawal of the media group’s bid for BSkyB is a victory for people throughout the country who have been taken back by the revelations of the scandal and the failure of the company to take responsibility. People believed it was beyond belief that Murdoch would continue with the takeover, and they have won this victory. No one should use power in this country without responsibility, he added.

Deputy prime minister Nick Clegg said that the move is decent and sensible. Now that the bid has been dropped and a proper inquiry established, they have a chance to clean up the corrupted relationship between politics, police and press. A spokesman for Downing Street said that the news is welcomed, noting that the company should focus on getting in order and cleaning up.

Labour MP Tom Watson has been at the forefront of calls for action related to phone hacking. He says that the move to withdraw the bid for BSkyB isn’t enough to draw a line under the scandal. The country is getting more angry about this, as the real problem is that News International (which is the unit that runs the company’s British papers) has no corporate humility. They haven’t seen anyone at the top own up to creating a culture in the newsroom that allows journalists to target an abducted 13-year-old girl’s phone. This is going to continue until someone at the top of the company carries the burden and apologises.

John Whittingdale, the chairman of the Commons Culture, Media and Sport Committee, says that the withdrawal is undoubtedly the right decision. He believes it was inevitable that the company pull out of the bid, as it was pretty clear that the House of Commons would unanimously vote in favour of the move, while three party leaders called for it as well. It was nearly impossible for News Corporation to continue with the strength and scope of the public’s feelings about the matter. It’s been clear for days that the public simply wouldn’t tolerate it. He also said that he expects Lord Leveson’s inquiry to take years to complete.

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