BSkyB's ITV stake 'against public interest'
Updated on 02 October 2007
BSkyB's 17.9 per cent holding in ITV "operates against the public interest", the Competition Commission has ruled.
The watchdog says the broadcaster - 39 per cent-owned by Rupert Murdoch's News Corporation - could take advantage of chances to weaken ITV in areas where the two businesses compete.
BSkyB now faces the prospect of having to sell down its stake, which it acquired for £940 million last November.
The final decision on what action should be taken will be made by Business, Enterprise and Regulatory Reform Secretary John Hutton.
The group's surprise move to snap up the ITV shares caused controversy by scuppering Virgin Media's ITV merger plans, drawing fire from major Virgin Media shareholder Sir Richard Branson.
The Commission will now consult on possible remedies to address the public interest finding, including possible divestment of the shareholding.
Commission chairman Peter Freeman 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."
He said the Commission did not think the shareholding was sufficient to give rise to competition concerns in other areas, such as advertising and television news.
It also concluded that the acquisition will have no adverse effect on the sufficiency of plurality in persons with control of media enterprises.
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