Dan Sabbagh, Media Editor
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Alistair Darling, the Trade and Industry Secretary, must rule on whether BSkyB’s purchase of a 17.9 per cent stake in ITV was against the public interest after asking Ofcom, the communications regulator, to hold an inquiry on the subject.
The minister moved himself centre stage after invoking the public interest test specifically created for media mergers under the 2003 Communications Act, the first time that the mechanism has been used.
Becket McGrath, a partner in Berwin Leighton Paisner, said the announcement allowed the minister “to say to MPs ‘Now I am doing something about it’ ”.
However, Mr McGrath said ministerial intervention was envisaged only as a last resort.
“Originally, the thinking was that politicans would only get involved in mergers in exceptional national security cases,” he said.
Ofcom’s public interest inquiry, to focus on issues such as media plurality, will conclude by April 27. Mr Darling will have to decide whether to clear Sky’s stake buy or submit it to the Competition Commission for further study. If the commission is called in, the final decision remains with the minister. A parallel competition inquiry led by the Office of Fair Trading remains outside his control.
BSkyB, in which News Corporation, parent company of The Times, has a 39.1 per cent stake, said: “Any positive environment for investment requires that business should be able to rely with confidence on government guidance when making decisions.” Its camp also pointed to Mr Darling’s statement that his decision to intervene “only means there will be an initial investigation by Ofcom”.
Steve Burch, Virgin Media’s chief executive, said: “Policy-makers and the public have good reason to be concerned about BSkyB’s acquisition of material influence over one of its principal competitors.”
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I struggle to see how a majority stake for Bskyb can be a bad thing! if you look at the progress and success that News Corp has created with broadcasters stateside such as Fox and the international influence they created for Sky News (The worlds most viewed station which also holds more political sway than any other). I think Darling should just realise that this is a wasted excercise and is only trying to show that this policy can be used if needed, however in this case it isnt.
Terence Hastie, Lymm, Cheshire
I think this a positive move by Darling. Sky should not be allowed any stake in ITV.
David, Durham, UK