BSkyB’s position in the pay-tv market is to be investigated by the Office of Fair Trading. The competition watchdog will assess the supply of Sky’s channels to its competitors to ensure the broadcaster is not dominating the market.
The move follows a review in January this year of undertakings imposed on the company in 1996 which was brought about to reflect the changing nature of the market with the introduction of digital television. The main focus of concern is the wholesale ratecard which governs the pricing of channels.
Today’s move for a fuller investigation will examine whether the company has infringed prohibitions in the Competition Act, which came into force in March this year. There is no confirmation that the probe was prompted by lobbying from a rival broadcaster and the particular nature of the infringement has not been revealed.
If it is found guilty of trading unfairly it could face fines totalling 10% of its UK turnover. The investigation will take six months, however, and by that time its findings may be irrelevant as NTL, Sky’s largest customer, has already agreed terms outside the ratecard and Telewest and ONdigital are likely to follow.
