Comcast, which last week unveiled a £22bn offer for Sky, has been labelled the “worst company in America” twice in recent years over shoddy customer service and pricing. It has also been involved in regulatory transgressions which legal experts believe means its plan to take over Sky should be closely scrutinised by watchdogs.
The pay-TV firm, which is poised to formalise its bid to try to steal Sky from under Rupert Murdoch’s nose, announced a $300m plan to spruce up customer service three years ago, but to little avail so far. Comcast was named “America’s most-hated company” in a respected customer satisfaction survey last year. On top of Comcast’s poor reputation with consumers, it is the company’s corporate transgressions that are most concerning to legal experts examining the merits of its potential takeover bid for Sky.
In recent years, Comcast has been fined more than $2m (£1.5m) by US regulators and was forced to relocate a rival news service nearer to its news channels on its TV guide, while one of its leading TV presenters was involved in a sex scandal. In November, NBC News host Matt Lauer, one of the best-paid TV presenters in the US, was fired after a complaint from a colleague about inappropriate sexual behaviour.
In 2016, Comcast paid a $2.3m fine to resolve a federal investigation into allegations it added charges to customers’ bills for unordered services, including premium channels, set-top boxes and digital video recorders.
As a condition of Comcast’s takeover of NBC Universal, the company agreed to a “neighbourhooding” rule to group similarly themed TV channels together to guard against potential anti-competitive or discriminatory behaviour. However, Comcast argued it did not need to relocate Bloomberg News, as it was not grouped with other news channels at the time of the merger. Bloomberg filed a complaint with the Federal Communications Commission which rejected Comcast’s argument and ordered it to move the business channel alongside its own stations in the channel line-up.
Comcast has pledged to “maintain Sky News’s existing brand and culture, as well as its strong track record for high-quality impartial news and adherence to broadcasting standards”.
“Sky News is an invaluable part of the UK news landscape,” Comcast said, when it announced its proposed bid for Sky last week.
Comcast has experienced echoes of the Fox News scandal, which saw top host Bill O’Reilly leave following accusations of sexual harassment. In November, NBC News host Matt Lauer, one of the best-paid TV presenters in the US, was fired after a complaint from a colleague about inappropriate sexual behaviour.
“Comcast has been found by US antitrust enforcers to have the opportunity and incentive to harm consumers and competition by favouring its own content, raising prices for rivals and potentially interfering with broadband transmission,” said Gene Kimmelman, the former chief counsel for competition policy at the US Antitrust Division during the Obama administration.
“Based on our experience in the US, it is likely that UK competition officials would have significant concerns about whether Comcast may harm competition and drive up consumer prices through an acquisition of all or the majority of Sky assets.”
Comcast has already been in regulatory hot water in the UK with a string of breaches of the broadcasting code in recent years.
A four-year investigation by Ofcom found that CNBC, BBC World News and CNN International repeatedly breached rules on sponsored and free content funded by governments, NGOs and charities. The international news channels broke the rules on sponsorship and current affairs programming almost 50 times between 2009 and 2011, Ofcom found.
In 2015, NBC Universal-owned channel E! Entertainment was fined £40,000 by Ofcom for broadcasting episodes of Girls of the Playboy Mansion when children were likely to be watching.
Legal experts believe these transgressions mean its takeover of Sky should be scrutinised just as closely by UK regulators as Rupert Murdoch’s has been.
Murdoch’s £11.7bn bid to buy the 61% of Sky he does not already own has been the subject of intense regulatory scrutiny since being announced almost 18 months ago.
21st Century Fox’s bid has been subjected to investigation by Ofcom and the Competition Markets Authority over its commitment to broadcasting standards, compliance and high editorial standards in the UK and US.
This was prompted by issues including sexual misconduct, harassment and corporate failure at Fox News in the US, the potential “Foxification” of Sky News and the ongoing issue of phone hacking dogging Murdoch and his son, James.
The CMA and Ofcom, which found the Murdochs were “fit and proper” owners of a licence to run Sky, cleared Fox on broadcasting standards.
Comcast has said it does not foresee any media plurality or regulatory issues in taking over Sky. Brian Roberts, the chief executive and son of the company’s founder, added that Comcast was a “proven steward” of the businesses it owns.
Earlier this week, Tom Watson, the shadow culture secretary, said any new bidders for Sky that emerge should be carefully vetted.
Comcast declined to comment.