DEPARTMENT FOR
BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2009/01)
issued by COI News Distribution Service. 2 January 2009
Competition
Minister Gareth Thomas today published for consultation draft
statutory undertakings which, if accepted, would require Sky
(British Sky Broadcasting Group plc) to divest a proportion of its
shares in ITV.
In January 2008, the Secretary of State announced his decision
that Sky's shareholding in ITV should be reduced in order to
remedy the substantial lessening of competition the Competition
Commission had found arose from Sky acquiring 17.9 per cent of ITV shares.
The undertakings would require Sky to:
- Divest shares in ITV to a level below 7.5 per cent;
- Agree
not to sell shares to persons associated with Sky/News
Corporation;
- Agree not to seek or accept representation on
the ITV Board; and
- Agree not to reacquire shares in ITV.
Following the Secretary of State's announcement, Sky has
sought to appeal the decision via the Competition Appeal Tribunal
and Court of Appeal. The Department for Business is today
commencing the necessary consultation on these draft undertakings
to ensure swift implementation of the remedies should the
Secretary of State's decision be upheld by the Court.
The Department is inviting interested parties to submit views on
the draft undertakings by Friday 23 January 2009.
Notes to editors
1. The draft undertakings can be found on
the BERR website at: http://www.berr.gov.uk/whatwedo/businesslaw/competition/mergers/public-interest/broadcasting/index.html
2. On 17 November 2006, Sky announced it had acquired 696 million
shares, representing 17.9 per cent of ITV shares. On 26 February
2007, the Secretary of State for Trade and Industry issued an
intervention notice to the OFT under the Enterprise Act 2002,
stating he believed it was, or could be, the case that the
Act's public interest consideration was relevant to this
transaction. The Secretary of State also asked Ofcom to prepare an
initial report on possible public interest issues.
3. On 24 May 2007, having considered the OFT and Ofcom reports,
and other representations, the Secretary of State announced his
decision to refer the acquisition to the Competition Commission
for investigation. The Secretary of State received the final
investigation report on 14 December 2007. This was published on 20 December.
4. On 29 January 2008 the Secretary of State for Business and
Enterprise announced his decision to make an adverse public
interest finding and to adopt the remedies recommended by the
Competition Commission. These included partial divestiture of
Sky's shares in ITV to a level below 7.5 per cent within a
specified period. The Secretary of State accepted Sky's
request not to make that period public, and this information is
redacted from the undertakings. BERR officials have received
details of the alternative methodologies by which Sky proposes to
sell the shares, which are not being made public in view of the
scope for this information to harm Sky's legitimate business interests.
5. On 22 February 2008, Sky appealed to the Competition Appeal
Tribunal (CAT) for a review of both the Secretary of State and
Competition Commission decisions. An oral hearing took place in
June. The CAT handed down its judgement on 29 September and Sky
subsequently applied for permission to appeal the judgement. On 4
December, the CAT issued a ruling refusing Sky's request. On
18 December, Sky submitted a renewed application for permission to
appeal direct to the Court of Appeal. It is anticipated that the
Court will consider this application early in 2009.
6. Final undertakings must be published for consultation at least
15 days before they can be accepted. Consulting now, without
prejudice to the outcome of the current application, is intended
to avoid any delay in accepting undertakings should this be
appropriate following the Court of Appeal's determination.
7. Representations on the draft undertakings should be submitted
in writing by Friday 23 January 2009 to: Paul Bannister, Consumer
& Competition Policy Directorate, Department for Business,
Enterprise & Regulatory Reform, 1 Victoria Street, London SW1H
0ET or by e-mail to paul.bannister@berr.gsi.gov.uk
Department for Business, Enterprise & Regulatory
Reform
7th Floor, 1 Victoria Street, London SW1H 0ET
Public enquiries +44 (0)20 7215 5000
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http://www.berr.gov.uk