BSkyB Faces Competition Inquiry

06 December 2000

The Office of Fair Trading has launched an investigation into satellite broadcaster BSkyB after accusations that it is acting anti-competitively.

The inquiry, expected to last six months, stems from a complaint by terrestrial digital network OnDigital that the wholesale price BSkyB charges for its channels is predatory. OnDigital alleges that this price is virtually the same as that charged by Sky to retail subscribers, making the channels unprofitable unless customers also buy premium services.

The OFT said it had decided to proceed with the inquiry because there were “reasonable grounds to suspect that there may have been breaches of the provisions of the new Competition Act”. This legislation, passed in March, conferred new powers on the watchdog to investigate and punish companies.

If BSkyB is found guilty of anti-competitive behaviour, it could be fined up to 10% of its turnover, backdated to when the new act was passed. It could also face compensation claims from aggrieved rivals.

News sources: Financial Times / The Times (London)