British Sky Broadcasting Group's (BSkyB) purchase of a 17.9 per cent shareholding in ITV raises public interest and competition issues, regulatory bodies ruled today.
Both the Office of Fair Trading (OFT) and Ofcom said that the purchase raises questions about competition and the number of news providers.
Their reviews are the result of a request from the trade and industry secretary, Alistair Darling, to investigate the purchase.
Mr Darling will now consider their reports and decide whether to refer the case to the Competition Commission. His announcement is expected on or before May 26th.
Ofcom's advice to the Cabinet minister is that "that there are public interest issues, in relation to sufficient plurality of news provision for both cross media and television news in the UK".
The OFT's three main findings were that a merger situation has been created; the situation "has resulted or may be expected to result, in a substantial lessening of competition within a market or markets in the UK"; and clear-cut remedies to earlier concerns from the OFT were not sufficiently resolved.
John Fingleton, chief executive of the OFT, said: "We have concluded that this partial ownership link between two key players raises significant competition concerns.
"Sky's shareholding means that ITV is no longer fully independent, and this may alter the future competitive landscape, especially as we approach digital switchover. Given the high stakes for tens of millions of UK consumers, we believe these risks to competition merit further examination."
BSkyB bought the stake in ITV last November amid takeover discussions of the commercial broadcaster from cable rival NTL, which has since been merged into Virgin Media.
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