BSkyB, Virgin Media, ITV and the Competition Commission (Summary 2)

28 02 2008

The second summary is of this article, published 27/02/2008.

Virgin Media surprised everyone by appealing against the Competition Comission’s decision to merely reduce BSkyB’s shareholding in ITV instead of making them give up their entire stake.  This is particularly odd since they claim that they don’t want to buy ITV anymore, and that they aren’t acting out of revenge either.  Naturally, plenty of people are suspicious of the notion that Virgin Media are acting on principle, but nobody can see what Virgin Media are getting from the case otherwise, so their motives are unclear.  For now, all people can do is accept that Virgin’s intentions are indeed honourable.

This case is likely to be costly for all concerned, and could have significant impact on media ownership.

The case raises the issue of plurality.  Virgin argue that BSkyB’s shareholding is a threat to media diversity.  John Hutton, the Secretary of State for Business and Enterprise, disagrees on the grounds that ITV themselves don’t have much control over their news broadcasts, which are supplied by ITN and are, after all, subject to the same regulations as every other TV news source.

Virgin also argue that even a 7.49% stake would still allow BSkyB too much control over ITV’s output.  ITV, however, don’t seem to want to make a fuss about this, which makes Virgin’s behaviour seem extremely odd, although Michael Grade did point out that Murdoch would probably not be happy if ITV were to suddenly acquire what amounts to nearly a fifth of BSkyB.  He has a point; after all, Murdoch was not at all happy when John Malone’s Liberty Media bought up 19% of News Corporation.

It has also been claimed that the Commission built their decision upon “implausible hypotheses”, but then the Commission did have to imagine what might happen in the future.

The Commission intends to defend its decision “vigorously”, but the airing of its arguments is sure to benefit the media and the public.


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