27th Apr 2007 14:30
Office of Fair Trading27 April 2007 68/07 28 April 2007 OFT REPORTS TO SECRETARY OF STATE ON BSKYB'S ACQUISITION OF STAKE IN ITV The OFT today reported to the Secretary of State on the completed acquisition byBritish Sky Broadcasting Group plc (BSkyB) of a 17.9 per cent stake in ITV plc(ITV). The OFT believes that the test for a merger reference to the CompetitionCommission is met on competition grounds.The report confirms the OFT's 12 January 2007 statement on merger jurisdiction.This includes the belief to the required standard that BSkyB has the ability'materially to influence the policy' of ITV within the meaning of the EnterpriseAct 2002.Following full first-phase review, the OFT's three key findings, to therequisite standard of belief, are that: • a relevant merger situation has been created, • this situation has resulted, or may be expected to result, in a substantial lessening of competition within a market or markets in the UK, and • clear cut remedies sufficient to resolve the OFT's competition concerns were not offered. The Secretary of State must announce his decision on or before the statutorydeadline of 26 May 2007. The OFT's report will also be made public no later thanthe same date and until such time the OFT will not release further details.John Fingleton, Chief Executive of the OFT, said'We have been asked by the Secretary of State to report on the competitionissues raised by this transaction. We have concluded that this partial ownershiplink between two key players raises significant competition concerns. Sky'sshareholding means that ITV is no longer fully independent, and this may alterthe future competitive landscape, especially as we approach digital switchover.Given the high stakes for tens of millions of UK consumers, we believe theserisks to competition merit further examination.' NOTES 1. On 26 February 2007 the Secretary of State intervened in the case byissuing a Public Interest Intervention Notice (the Notice) requiring the OFT toinvestigate and report on whether it believes that it is or may be the case thata relevant merger situation has been created and, if so, whether the creation ofthat situation has resulted, or may be expected to result, in a substantiallessening of competition within any market or markets in the United Kingdom forgoods or services. The Secretary of State also required Ofcom to reportseparately on the effect of the media public interest consideration mentioned inthe Notice. The Secretary of State requested the OFT and Ofcom to report to himby 27 April 2007. 2. The OFT's report to the Secretary of State on jurisdictional andcompetition issues is binding and therefore any anti-competitive outcomeidentified by the OFT shall be treated as being adverse to the public interestunless it is justified by one or more than one relevant public interestconsideration. A reference to the Competition Commission may be made by theSecretary of State if he believes that it is or may be the case that (i) arelevant merger situation has been created; (ii) the creation of that situationhas resulted, or may be expected to result in a substantial lessening ofcompetition within any market or markets in the United Kingdom for goods orservices; and (iii) combined with one or more than one relevant public interestconsideration operates or may be expected to operate against the publicinterest; or (iv) although the creation of that situation has not resulted, andmay be expected not to result in a substantial lessening of competition, one ormore than one relevant public interest consideration operates or may be expectedto operate against the public interest. 3. The Secretary of State will also consider whether undertakings in lieu ofa reference are justified, but is bound by the OFT's finding on whether it wouldbe appropriate to deal with the matter (disregarding any public interestconsiderations) by way of undertakings. 4. In the event that the Secretary of State concludes that there are nopublic interest considerations that are relevant, he will instruct the OFT todeal with the merger as an ordinary merger case. 5. The OFT's report will be published following the Secretary of State'sannouncement of his decision on reference. MEDIA enquiries: 020 7211+Corinne Gladstone 8899 Alex Hunter 8900Jonathan Marciano 8898 Nick Spears 8901Nnenna Oleforo 8993Out of hours: mobile: 07774 134814 fax messages: 020 7211 8961Copies of press notices: Ext. 8993http://www.oft.gov.uk PUBLIC enquiries: 0845 7224499 [email protected] reports and consumer information leaflets are available free from:OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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