Ofcom survey could put the brakes on Branson vs Murdoch courtroom scrap
Tuesday, April 17th, 2007Regulator halts legal wrangling
Virgin Media, which filed its case against Sky in the High Court last week, may have to wait until the same Ofcom investigation which it petitioned for to be carried out before any courtroom wrangling can take place.
After the widely publicized withdrawal of Sky’s most popular channels from Virgin Media’s digital TV service in March this year, Virgin, along with BT, Setanta and Top-Up TV asked Ofcom to conduct a survey of the British pay TV market to determine whether or not Sky had and was abusing a dominant market position – the court case itself is based on the Competition Act 1998 and sections of the EC Treaty which prohibit a market leader from abusing its position.
Ofcom has agreed to carry out the study, the outcomes of which may see a deal forcing Sky to return its channels to Virgin, which is presumably what Virgin is hoping the outcome of the court case, should it happen, will be.
When renegotiating a deal for the channels, Sky asked Virgin for more money, and Virgin refused to pay up. The channels, including Sky One and Sky News, were promptly withdrawn from the Virgin service. Sky are expected to defend claims of market abuse, by highlighting the popularity of their channels, and saying that price hikes were justified. Sky also have also been quick to point of Virgin’s recently acquired monopoly on the UK cable network.
In either case, Sky now have 24 days to respond before any legal proceedings can go ahead.
April 18th, 2007 at 9:41 am
i think sky should get a grip this is black mail!
May 2nd, 2007 at 8:15 am
Sky have enjoyed their position of top dog in the pay TV market for years now, and have invested a lot in securing this position by introducing fresh content and new technology, such as Sky+ and HD.
Virgin present the first real challenge Sky has faced, and they certainly wont take kindly to the new kid on the block upsetting the status quo.
Sky’s main problem at the moment is that is has managed to piss off everyone at once - in the wake of the current Virgin/Sky court proceedings and the Ofcom report, prompted by a joint response from practically everyone else in the pay-TV industry, it will be surprising if Sky manage to get through the year without having to make some sort of concession in the form of a fine, or a deal involving the return of some of its channels to Virgin.