BSkyB to refute OFT breach of law finding
LONDON - BSkyB says it will "robustly" defend itself against the Office of Fair Trading's finding that it has acted anti-competitively in its digital television practices.
After a two-year enquiry, the OFT said today that BSkyB has infringed UK competition law. It has given the broadcaster the opportunity to respond to the findings before it makes a final decision on the case, which it says will not be likely before summer 2002.
The case was brought by ITV Digital, which accused BSkyB of charging unfair prices for subscriptions to its channels. It also said that BSkyB's deals with some digital services prevented ITV Digital getting access to channels.
The OFT has found that BSkyB's discounts to distributors "may be set at a level that prevents rival premium channel providers from entering the market". It has also said that the margin between BSkyB's wholesale price for distributors and retail price, paid by subscribers, "may not be wide enough to allow a normal profit to be made by a third-party distributor of its premium channels".
BSkyB has already sent its first salvo, arguing that "the OFT is simultaneously alleging that BSkyB's wholesale prices are both too high and too low".
In a statement, the company goes on to say: "Furthermore, the OFT is alleging that the discounts in BSkyB's rate card are anti-competitive, despite those discounts previously being approved by the OFT."
BSkyB's share price this morning was 742.5p, up 1.02%, after initially falling on the news, despite the OFT's findings being widely predicted. Both Granada and Carlton Communications, the companies behind ITV Digital, were trading up. Granada was worth 138.75p this morning, up 2.02%, while Carlton was valued at 231.75p, up 1.87%.
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