BSkyB wins Sky Sports appeal against Ofcom

BSkyB has won its appeal against Ofcom’s decision to force the company to reduce the price it charges rival providers to show Sky Sports.

The Competition Appeal Tribunal ruled that Ofcom’s concerns over the way Sky sold its sports channels were “unfounded”.

The ruling follows a two-year legal battle after Ofcom ordered BSkyB to sell Sky Sports 1 and 2 to competitors for up to 23% less than the previous wholesale price in March 2010.

Mr Justice Barling said: “The tribunal has concluded that Ofcom’s core competition concern is unfounded. That concern is based on the finding to which we have referred, namely that Sky has deliberately withheld from other retailers wholesale supply of its premium channels, preferring to be entirely absent from those retailers’ platforms rather than to give them wholesale access, and that in doing so Sky has been acting on strategic incentives unrelated to normal commercial considerations of revenue/profit maximisation.

“The tribunal is of the view that Ofcom has, to a significant extent, misinterpreted the evidence of these negotiations, which does not support Ofcom’s conclusion. We have found a significant number of Ofcom’s pivotal findings of fact in the statement to be inconsistent with the evidence.”

In a statement, Ofcom said: “We are very surprised and disappointed with today’s decision by the Competition Appeal Tribunal, which we believe is contrary to the evidence and not in the interests of consumers. In a separate investigation, the Competition Commission also very recently concluded that competition in the pay-TV market is not effective. We will therefore immediately consider what further steps we should take to ensure there is effective competition in the pay-TV sector, in line with our duties.”

Read the full Guardian article here.