The British Office of Fair Trading (OFT) says it proposes to make a decision that BSkyB has behaved anti-competitively and has infringed UK competition law.
BSkyB now has the opportunity, for the first time, to make written and oral representations on the OFT’s proposed decision that will be taken into account before any final decision is made.
In a statement the OFT said it does not anticipate being in a position to make a final decision before summer next year.
The OFT has today written to BSkyB setting out why it proposes to make a decision that the company has a dominant position on the wholesale market for the provision of pay premium sports and film channels.
It also proposes to make a decision that BSkyB has abused its dominant position both in that market and in the market for the distribution of pay TV channels.
The OFT’s proposed decision is that certain conduct of BSkyB infringes Chapter II of the Competition Act 1998, in particular:
- BSkyB's margin between the wholesale price it charges distributors and the retail price paid by its own subscribers may not be wide enough to allow a normal profit to be made by a third-party distributor of its premium channels, even if it is as efficient as BSkyB in distributing.
- The discounts BSkyB gives distributors when they take packages of premium channels may be set at a level that prevents rival premium channel providers from entering the market.
- The discounts that BSkyB offers to distributors on one version of its ratecard for its premium sports and film channels (ie, the "Pay-to Basic" version) may prevent rival premium channel providers from entering the market and may distort distributors' marketing decisions.