The Culture Secretary said she is “minded to” refer Rupert Murdoch’s 21st Century Fox takeover of Sky to the competition watchdog.
Karen Bradley’s decision is a blow to the media mogul’s hopes of having the £11.7bn deal waved through without further scrutiny.
Mr Murdoch already owns 39% of the satellite broadcaster.
An earlier attempt to take over Sky was abandoned in the wake of the phone hacking scandal.
Ms Bradley told the House of Commons that the merger would increase the Murdoch family’s ability to influence the UK’s news agenda and political process.
As a result there were “clear grounds” to refer the deal to the Competition and Markets Authority.
The culture secretary said she was “minded to” do so, using the legal phrase required by legislation.
The parties involved can make representations until Friday 14 July, when Ms Bradley will make a further decision.