Sky to challenge Government's ITV ruling

by Fiona Ramsay, Media Week 21-Feb-08, 15:15

LONDON - Sky is to formally launch a challenge to the Government's ruling that it must reduce its 17.9% stake in ITV, although a legal expert has warned that the broadcaster is unlikely to succeed in overturning the ruling.

Following the Government's recent acceptance of a Competition Commission decision that Sky must cut its ITV stake to below 7.5%, Sky is lodging an appeal with the Competition Appeal Tribunal tomorrow (22 February).

The CAT has the power to quash part or all of the Competition Commission's findings, and to send the case back to the Commission for further consideration.

Sky will argue that the Competition Commission "made mistakes" during its investigation.

Jeremy Darroch, Sky's chief executive, said: "The Competition Commission has failed to meet the burden of proof required to justify its conclusions. It has built its case on a series of implausible hypotheses and has recommended an arbitrary remedy for a non-existent problem."

But Anthony Woolich, partner at the business law firm LG, said Sky had a "low chance" of winning the appeal as the CAT would be looking to find an "error of law" in the CC's decisions. He said: "The regulators must be allowed some discretion and the CC looked at it for some considerable time. So with the CAT looking at it for a few days, they won't want to interfere."

But he said that "in a sense", Sky has nothing to lose. "It is true that there are not many cases when a merger situation is based on such a low percentage."