Virgin Media Files Legal Proceedings Against Sky

Virgin Media has filed legal proceedings in the High Court aimed at resolving the heavily publicised channel carriage dispute with Sky.

The proceedings are based on Section 18 of the UK Competition Act 1998 and Article 82 of the EC Treaty, both of which prohibit a company from abusing its dominant position.

Virgin Media has said that it is upset over Sky’s dominance in the UK Pay TV market, claiming the company has “engaged in a strategy to stifle competition by using its dominance against Virgin Media”.

Earlier in the year, the two companies became locked in battle, after Sky withdrew its basic channel package – including Sky One and Sky News – from Virgin Media after talks broke down over the increase in the cost of carrying the channels on the platform (see Branson Vs Murdoch: Round Five).

In press statement released today, Virgin Media said: “Sky has aggressively promoted the withdrawal as a reason for Virgin Media customers to switch to Sky.”

It continued: “Sky demanded a price for its basic channels that was some 17 times greater than it was prepared to pay for the Virgin Media TV channels, even after adjusting for the Sky basic channels’ marginally higher share of total viewership.

“This disparity in channel valuation is just one manifestation of Sky’s systematic abuse of its dominant position and its longer term objective of suppressing existing and emerging competition from other companies.”

Virgin Media CEO, Steve Burch, said: “This dispute is one very specific example of how UK consumers are being denied the benefits of a diverse, dynamic and competitive pay TV market. Litigation is obviously a serious step and a last resort but we are determined to have these issues resolved as quickly and fairly as possible.”

Virgin Media: www.virginmedia.com BSkyB: 020 7705 3000 www.sky.com