Britain's BSkyB is to launch a legal challenge against the UK Competition Commission's decision to force the pay-TV operator to sell down its stake in rival broadcaster ITV.
BSkyB said today that it would lodge its application with the Competition Appeal Tribunal on Friday February 22, to appeal against the key conclusions from the Commission which were subsequently backed by the government.
BSkyB will argue that the Commission made mistakes at key steps of its investigation, including its decision that a merger had occured between the two companies and that the investment prevented ITV from pursuing an independent competitive strategy.
It will also argue that the order to reduce the 17.9% stake to below 7.5% was an unreasonable and disproportionate remedy, especially as BSkyB had offered to give up all its voting rights. The commission had said the stake hindered competition.
'We believe fundamentally that companies have a right to invest within a transparent framework of competition law,' BSkyB's CEO Jeremy Darroch said.
'A merger has not taken place, Sky and ITV are distinct entities with independent strategies and Sky could not block a shareholder resolution without voting rights,' he added.
BSkyB, which has Rupert Murdoch's News Corp as its largest shareholder, said the appeal tribunal had the power to quash part or all of the previous findings and send the case back to the Competition Commission for further consideration.
ITV had welcomed the UK government's initial ruling on the stake.
BSkyB paid 135 pence per share, or £940m sterling, for its stake in November 2006, effectively blocking cable group NTL - now part of Virgin Media - from buying ITV.
