OFT press release follows…

The OFT today reported to the Secretary of State on the completed acquisition by British 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 Competition Commission 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 Enterprise Act 2002.

Following full first-phase review, the OFT’s three key findings, to the requisite 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 statutory deadline of 26 May 2007. The OFT’s report will also be made public no later than the 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 competition issues raised by this transaction. We have concluded that this partial ownership link between two key players raises significant competition concerns. Sky’s shareholding means that ITV is no longer fully independent, and this may alter the future competitive landscape, especially as we approach digital switchover. Given the high stakes for tens of millions of UK consumers, we believe these risks to competition merit further examination.’