Sky Could Be Forced To Sell ITV Stake

Peter Freeman, chairman of Commission, 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.”

Previously, both Ofcom and the Office of Fair Trading launched investigations into the acquisition (see Darling Orders Investigation Of Sky/ITV Deal), which lead to the matter being referred to the Competition Commission in May.

A spokesman for Virgin Media, Sky’s biggest rival, said: “Strong remedies are required to finally resolve the matter – Sky should not be permitted to remain in a position where there is any question whatsoever about its ability to influence ITV. We will be closely engaged with the Competition Commission during this next remedies stage.”