Sky cleared of breaking competition law

Satellite TV operator BSkyB was yesterday (Tuesday) cleared of breaching competition law by the Office of Fair Trading after an investigation that has dragged on for nearly three years.

Sky had been accused by cable operators NTL and Telewest, as well as the now defunct ITV Digital, of over charging to carry its Sky Sports and movies channels.

The ruling stated the company had not broken competition law, but still said Sky was "around the borderline of anti-competitive behaviour".

The OFT's decision has been labelled a massive U-turn after it indicated just 12 months ago that it would find Sky guilty of acting anti-competitively.

"Allegations that Sky unlawfully distorted competition in pay TV called for a thorough investigation," said OFT director-general John Vickers.

"We have concluded that Sky is dominant in the supply of premium channels. On the key issue of the alleged margin squeeze against rivals we found Sky to be around the borderline of anti-competitive behaviour.

"Overall there are not sufficient grounds to conclude that Sky has broken competition law," he said.

The broadcaster, which set out its defence to the OFT earlier this year, is also cleared of two other allegations of anti-competitive behaviour.

It said: "After an investigation lasting nearly three years, Sky welcomes confirmation that its conduct has not infringed the Competition Act."

When ITV Digital collapsed in May, under the burden of £1.2 billion in debts, it emerged the venture was paying Sky £60m a year to show Sky Sports and other pay channels.

Sky's rivals complained this was too high because it meant they could not make a profit from selling the channels to their subscribers.