Regulator says BSkyB stake in ITV 'against the public interest'

Britain's antitrust regulator said that British Sky Broadcasting's 17.9% stake in broadcaster ITV restricts competition and is against the public interest, an Associated Press report said.

The Associated Press report said provisional finding by the Competition Commission means that BSkyB, which is 39% owned by Rupert Murdoch's News Corp., could be forced to sell part or all of its stake in ITV.

'BSkyB's shareholding in ITV would be likely to lead to a substantial lessening of competition by giving it the ability to influence ITV's strategy,' a commission statement, quoted by the Associated Press report, said.

However it added that it did not believe the stake raised competition concerns in regard to advertising or TV news, in contrast to concerns from media regulator Ofcom that the deal raised public issues about the plurality of TV news provision.

The commission said it will now 'consult on possible remedies to address the adverse public interest finding, including possible divestment of the shareholding.'

BSkyB bought the ITV stake in November 2006 for $1.8 billion in a move that most analysts viewed as an attempt to prevent its pay-TV rival NTL from acquiring ITV.

The watchdog said it was concerned that BSkyB's stake could allow it to block special resolutions proposed by ITV's management, noting a new strategic plan announced recently by ITV chairman Michael Grade to expand its Internet and TV productions to bring in more viewers, the report said.