The Competition and Markets Authority (CMA) said if Fox’s plan to take full control of Sky went ahead, it was “ likely to operate against the public interest”.
While it found there was not a lack of a genuine commitment to meeting broadcasting standards in the UK, its concerns over the impact on media plurality meant that overall it believed the deal was not in the public interest.
The CMA has put forward three ways it believes its concerns could be addressed - blocking the deal, spinning off Sky News, or “behavioural” changes to protect Sky News from direct influence from the Murdoch Family Trust.
But its findings come as Sky is set for a new owner, after Walt Disney agreed a £39 billion deal to buy Fox’s entertainment assets.
Anne Lambert, chairwoman of the CMA’s independent investigation group, said: “Media plurality goes to the heart of our democratic process. It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.
“We have provisionally found that if the Fox/Sky merger went ahead as proposed, it would be against the public interest. It would result in the Murdoch family having too much control over news providers in the UK, and too much influence over public opinion and the political agenda.”