Murdoch opponent challenges UK regulator over Sky deal

LONDON (Reuters) - Activist group Avaaz stepped up its battle to stop Rupert Murdoch buying Sky , launching a legal challenge to the regulator's view that the pay-TV group would still be a "fit and proper" owner of a broadcasting license if the deal goes ahead.

Britain's broadcasting regulator Ofcom ran a "fit and proper" test when it assessed whether the $15 billion deal to bring Sky under the full control of Murdoch's Fox (NASDAQ: FOXA) should be reviewed on the grounds of broadcasting standards and media plurality.

It said in June that if Sky were fully owned by Twenty-First Century Fox, it would still be "fit and proper" to hold a broadcasting license, and also said it had no serious concerns about Fox's commitment to broadcasting standards.

Despite Ofcom's recommendations, Britain's Culture Secretary Karen Bradley decided this month to refer the deal to a wide-ranging review on the grounds of broadcasting standards and media plurality, which looks at Murdoch's influence across Britain's newspaper and broadcasters.

Online pressure group Avaaz said it was filing papers in court on Friday seeking a judicial review of Ofcom's "fit and proper" decision.

It claims Ofcom did not correctly assess standards at Fox News and the track record of Fox CEO James Murdoch, Rupert's son, who was responsible for Murdoch's British newspapers during a phone-hacking scandal in 2011.

"Repeated, large-scale scandals in the Murdoch empire indicate that something is very rotten at the core of their businesses," said Avaaz campaign director Alex Wilks.

"Ofcom didn't dig deep enough before declaring the Murdochs fit to own even more of our media."

Ofcom said it would defend its ruling.

"We will defend our 'fit and proper' assessment, which was independent, expert and based on the evidence," a spokesman said.

James Murdoch said earlier this month that the deal should be assessed solely on the evidence and not to settle political scores.

"Whether or not 30 years ago someone had a grievance about a political position that a newspaper took ... is irrelevant," James Murdoch, who is CEO of Fox and chairman of Sky, said at the Royal Television Society's Cambridge Convention.

(Reporting by Paul Sandle; Editing by Keith Weir)

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