BSkyB Appeal Dismissed by Court of Appeal
The Court of Appeal has today handed down its judgment in the BSkyB/ITV litigation, The outcome is is that the Competition Commission and the Secretary of State for Business Enterprise and Regulatory Reform (both represented by teams from Monckton Chambers) have succeeded on all of the various appeals and cross appeals which were live before the Court.
The case arose from the acquisition by British Sky Broadcasting plc (Sky) in November 2006 of 17.9% of the issued share capital of ITV plc.
The acquisition was referred to the Competition Commission by the Secretary of State under the public interest provisions of the Enterprise Act (the first reference of its kind), A Competition Commission investigation concluded that a relevant merger situation had been created leading to a substantial lessening of competition. The Commission recommended that Sky be required to divest itself of enough shares to reduce its holding to below 7.5%. The Commission however concluded that the merger was not likely to operate against the public interest on grounds relating to media plurality. The Secretary of State agreed with the Commission’s conclusions on media plurality.
Before the CAT, Sky challenged the Commission’s findings on the competition issues and remedies, and Virgin challenged the findings of the Commission and the Secretary of State on media plurality, focussing on a question of statutory interpretation under the new regime for media mergers. The Competition Appeal Tribunal rejected Sky’s challenge but upheld that of Virgin.
The Court of Appeal has considered the findings of the CAT on both sets of issues with Sky appealing on both competition and plurality grounds, and the Commission and the Secretary of State also appealing on the plurality issue.
In a judgment given by Lloyd LJ, Sky’s appeal against the CAT’s judgment on competition issues was rejected, but the appeals of the Commission, the Secretary of State and Sky on the media plurality issue were upheld. The result is that the decisions of the Commission and the Secretary of State on competition issues have been upheld and their decisions on plurality have been reinstated.
Paul Lasok QC and Elisa Holmes represented the Secretary of State (now, for Business Innovation and Skills)
John Swift QC, Daniel Beard and Rob Williams represented the Competition Commission