The Competition Commission has provisionally found that Sky’s purchase of a 17.9 per cent share in ITV plc restricts competition and therefore operates against the public interest.
In a provisional report published today the Commission has concluded that BSkyB’s shareholding “would be likely to lead to a substantial lessening of competition (SLC) by giving it the ability to influence ITV’s strategy” but is unlikely to have an adverse effect on the sufficiency of plurality.
The Commission will now consult on possible remedies to address the adverse public interest finding which could include forcing bSKyB to sell its shareholding.
CC Chairman and Chairman of the Inquiry Group, Peter Freeman, said: “The acquisition has made BSkyB ITV’s largest shareholder by some margin and whilst our provisional view is that this would not necessarily affect day-to-day operations, BSkyB would be able to influence ITV’s key strategic decisions, particularly relating to investment, whether in content, capacity or new technology.”
“As a pay-TV operator, BSkyB faces competition from the free-to-air TV offer, of which ITV is an important part. BSkyB would therefore have both the ability and incentive to take advantage of opportunities to weaken ITV or prevent it from� taking actions that would threaten BSkyB’s interests.� We do not think that this shareholding is sufficient to give rise to competition� concerns in other areas we’ve looked at such as advertising and TV news� provision.”
“As far as the media public interest consideration is concerned, we do� not think there is sufficient evidence that the acquisition will have an adverse effect, given the degree of influence that BSkyB has acquired over ITV, and ITN� as its news provider, the regulatory requirements for impartiality and a strong culture of editorial independence in TV news.”
The CC must send its final report to John Hutton, Secretary of State for the Department for� Business, Enterprise & Regulatory Reform (BERR) by 2 January 2008 who must then decide on the basis of the report what action should be taken. �
ITV has welcomed today’s findings. A spokesman said the company would “be reviewing the commission’s notice of possible remedies in detail and look forward to working with the commission so that the issues arising from BSkyB’s stake can be addressed.”
Anyone wishing to comment on the notice of possible remedies or the provisional findings should do so by 15 October 2007 and 23 October 2007, respectively, by emailing BSkyB-ITV@cc.gsi.gov.uk or by writing to the Inquiry Secretary (BSkyB/ITV inquiry), Competition
Commission, Victoria House, Southampton Row, London WC1B 4AD.
