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Europe

Slapped Wrist for Sky

9:10 AM -- The U.K. Competition Commission has decided that satellite TV and broadband service provider Sky restricted competition by acquiring a 17.9 percent stake in British commercial TV player ITV plc (London: ITV) in November 2006. (See CC Finds Against Sky and Sky Buys ITV Stake.)

Now the Commission will decide what action to take, saying it may even force BSkyB to sell its ITV holding.

Big deal. BSkyB got what it wanted last November: Its move scuppered the aspirations of its archrival, cable operator Virgin Media Inc. (Nasdaq: VMED) (then called NTL), which wanted to buy ITV outright. ITV rejected NTL's takeover bid once BSkyB became a significant shareholder. (See ITV Rejects $8.9B NTL Bid.)

So BSkyB gets its wrist slapped, and, if forced to sell its stake in ITV, may even make a profit from the transaction, an outcome hardly likely to act as a deterrent to other companies planning cynical market interventions.

Instead, a juicy fine -- say, £500 million ($709 million), about the equivalent of BSkyB's first-half EBITDA -- might deter it, and others, from similar action in the future.

It would also make the Commission seem like a relevant and meaningful institution instead of a half-hearted body that's frightened of its own shadow.

— Ray Le Maistre, International Views Editor, Light Reading

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