Commission’s recommendation to reduce shareholding upheld
The Court of Appeal has dismissed BSkyB’s legal challenge to the Competition Commission’s findings over its share in ITV but upheld the Commission’s conclusion on media plurality.
The Competition Commission found BSkyB’s acquisition of 17.9% of ITV’s issued share capital in 2006 would result in an expected “lessening of competition” and recommended it reduce its holding to below 7.5%. This would satisfy the so-called “media plurality” issue, by which there should be sufficient numbers of people with control of media enterprises to guard against dominance by one person.
BSkyB’s share offer had acted as a “spoiler” on an earlier bid for ITV by Virgin Media, at a lower share price. Virgin’s offer was worth about £1.22 per share while BSkyB offered £1.35.
In BSkyB v Virgin (British Sky Broadcasting Group plc v Competition Commission and others; Virgin Media Inc v Competition Commission and others) [2010] EWCA Civ 2, [2010] All ER (D) 130 (Jan), Lord Justice Lloyd upheld the Commission’s findings on curbing BSkyB’s shares holdings.
As regards dominance in the media, Lloyd LJ said: “what was required [to satisfy the media plurality issue] was not just an exercise of counting heads, and that it was proper and necessary to have regard to the actual degree of control exercised by one enterprise over another.”
Later in his judgment, he said: “when it comes to assessing the plurality of the aggregate number of relevant controllers and to considering the sufficiency of that plurality, the Commission may, and should, take into account the actual extent of the control exercised and exercisable over a relevant enterprise by another, whether it is a case of deemed control resulting from material influence under section 26 or rather one of actual common ownership or control.”
.tmb-mov69x69.jpg?sfvrsn=16d9dd3d_1)
