BSkyB Under Spotlight As Watchdog Scrutinises ITV Stake

The Competition Commission has ruled that BSkyB’s purchase of a 17.9% stake in ITV restricts competition.
The regulator, publishing provisional findings of its investigations into the stake, said it would consult on possible measures, including forcing BSkyB to sell the stake.
The regulator also said that the share, bought for £940 million in 2006, would allow BSkyB to influence ITV strategy.
However concerns were not expressed in other areas, such as advertising and news provision.
A statement released by the regulator said: “The acquisition has made BSkyB ITV’s largest shareholder by some margin.
“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.”
BSkyB bought the stake in November 2006 in a controversial move that shadowed rival Virgin Media’s planned merger with the broadcaster.
A spokesperson for Virgin Media said: “The Competition Commission’s provisional findings are a major step towards addressing the problems caused by Sky’s stake in ITV.
“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.”
The initial Competition Commission finding was welcomed by Bectu's General Secretary Gerry Morrissey: "Bectu welcomes this decision. If BSkyB had been allowed to retain its share in ITV it would have been bad for employees, viewers and the health of British broadcasting.
"We now expect Virgin to talk to BECTU and outline its plans for the future of the commercial channels."
The union hopes this decision will pave the way for talks to take place on an ITV/Virgin merger. A recognised union at both companies Bectu said it would provide the opportunity for talks on how to move ITV forward so that greater investment can be given to programming, news and regional output.
The Competition Commission must send its final report to the Secretary of State, John Hutton by January 2, 2008.
(DS/SP)