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BSkyB cleared of breaking competition rules

LONDON - The Office of Fair Trading has cleared BSkyB of acting anti-competitively, following complaints from rivals about subscription charges on its digital satellite network, despite saying the broadcaster has a dominant position.

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The OFT has completed a three-year investigation into BSkyB, which was launched after allegations of overcharging for its channels were made by the now-collapsed digital terrestrial service ITV Digital.

ITV Digital, which was owned by ITV companies Carlton Communications and Granada, claimed it could not make a profit by selling Sky's channels on to subscribers without charging a high price for them, which it argued discouraged consumers from signing up to ITV Digital.

BSkyB was also accused of mixed bundling, which meant it offered discounts to distributors for selling more of its channels.

The OFT said in its report that BSkyB is "dominant in its market for the wholesale supply of pay channels with certain premium sports and film content".

However, in response to allegations that the satellite broadcaster had acted anti-competitively, John Vickers, director general of the OFT, said that there was insufficient evidence to conclude the broadcaster behaved anti-competitively.

"We have concluded that BSkyB is dominant in the supply of premium channels. On the key issue of the alleged margin squeeze against rivals, we found that BSkyB to be around the borderline of anti-competitive behaviour. Overall, there are not sufficient grounds to conclude that BSkyB has broken competition law," Vickers said.

In a statement, Sky welcomed the OFT's findings. "After an investigation lasting nearly three years, BSkyB welcomes confirmation that its conduct has not infringed the Competition Act."

The broadcaster has denied claims that it has acted anti-competitively. Speaking at the company's first-half results in February, chief executive Tony Ball said he would "go the whole way" in its fight against the accusations of anti-competitive behaviour.

He said: "We are convinced we have played by the OFT's rules and stuck to its rate card. We will go all the way, to the courts right through to appeal if necessary."

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