UK Government

Department for Business, Innovation and Skills: Government Consults on Proposed Modifications to draft text of ‘Final Undertakings’ to Reduce Sky Stake in ITV

Press Release   •   Dec 07, 2009 11:48 GMT

The Government has published for consultation proposed modifications to the draft ‘final undertakings’ which it proposes to accept from Sky (British Sky Broadcasting Group plc).  The undertakings will require Sky to divest a proportion of its shares in ITV.

The draft ‘final undertakings’ were originally published for consultation in January 2009.  The purpose of these modifications clarifies how the undertakings should be interpreted.

The Department is inviting interested parties to submit views on the proposed modifications to the draft ‘final undertakings’ by Tuesday 15 December 2009.

Notes to editors

1.      The list of proposed modifications to the draft Final Undertakings (along with the original draft text) can be found on the BERR website at: http://www.berr.gov.uk/whatwedo/businesslaw/competition/mergers/public-interest/broadcasting/index.html

2.      On 17 November 2006, Sky announced it had acquired 696 million shares, representing 17.9 per cent of ITV shares.  On 26 February 2007, the Secretary of State for Trade and Industry issued an intervention notice to the OFT under the Enterprise Act 2002, stating he believed it was, or could be, the case that the Act’s public interest consideration was relevant to this transaction.  The Secretary of State also asked Ofcom to prepare an initial report on possible public interest issues.

3.      On 24 May 2007, having considered the OFT and Ofcom reports, and other representations, the Secretary of State announced his decision to refer the acquisition to the Competition Commission for investigation.  The Secretary of State received the final investigation report on 14 December 2007. This was published on 20 December.

4.      On 29 January 2008 the Secretary of State for Business and Enterprise announced his decision to make an adverse public interest finding and to adopt the remedies recommended by the Competition Commission.  These included partial divestiture of Sky’s shares in ITV to a level below 7.5 per cent within a specified period.

5.      On 22 February 2008, Sky appealed to the Competition Appeal Tribunal (CAT) for a review of both the Secretary of State and Competition Commission decisions.  An oral hearing took place in June.  The CAT handed down its judgement on 29 September and Sky subsequently applied for permission to appeal the judgement.  On 4 December, the CAT issued a ruling refusing Sky’s request.  On 18 December, Sky submitted a renewed application for permission to appeal direct to the Court of Appeal.  The Court accepted Sky’s application and an oral hearing took place between 28 – 30 October 2009.

6.      Without prejudice to the outcome of Sky’s application to the Court of Appeal, the draft text of the Final Undertakings was published for consultation in January.  This was intended to avoid any delay in accepting the undertakings should this be appropriate following the Court of Appeal’s determination.  Having received a number of comments on the draft undertakings, BIS now considers it appropriate to make certain modifications to the text.  As required under the Enterprise Act, BIS is now publishing those proposed modifications for consultation.

7.      Representations on the proposed modifications to the draft Final Undertakings should be submitted in writing by Tuesday 15 December 2009 to: Paul Bannister, Consumer & Competition Policy Directorate, Department for Business, Innovation and Skills, 1 Victoria Street, London SW1H 0ET or by e-mail to paul.bannister@bis.gsi.gov.uk

Department for Business, Innovation & Skills

The Department for Business, Innovation and Skills (BIS) is building a dynamic and competitive UK economy by: creating the conditions for business success; promoting innovation, enterprise and science; and giving everyone the skills and opportunities to succeed. To achieve this it will foster world-class universities and promote an open global economy. BIS - Investing in our future.

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