Virgin demands tougher decision on Sky's ITV stake

by Isabella Piasecka, Media Week 25-Feb-08, 15:19

LONDON - Virgin Media has launched a legal challenge against the Competition Commission's recent ruling on Sky's 17.9 per cent ITV stake, calling for even tougher sanctions to be applied.

Virgin is today filing an appeal with the Competition Appeal Tribunal, disputing the Competition Commission's conclusion that a reduction in Sky's ITV stake to 7.5 per cent would adequately address what it deems "a substantial lessening of competition".

Virgin also claims the Competition Commission has made "significant errors" in interpreting and applying the rules of the 2003 Enterprise Act, which was introduced to protect the plurality of UK media.

In a statement the Richard Branson-backed company said: "If not corrected, this error will undermine the future efficacy and objectives of the public interest regime set out in the Act."

Virgin's move follows last month's decision by John Hutton, the Secretary of State for Business, Enterprise and Regulation, to accept the Competition Commission's report, ruling that Sky must cut its ITV stake to less than 7.5 per cent.

Sky built up a 17.9 per cent stake in ITV in November 2006, buying shares from Fidelity and other institutional investors to become a large minority shareholder.

It was widely seen as an attempt to scupper NTL's (the former name of Virgin Media) planned £5bn bid for ITV, which would have created strong competition for Sky.