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    Virgin Media Challenges Sky's Anti-Competitive Behaviour in the High Court

    This is a discussion on Virgin Media Challenges Sky's Anti-Competitive Behaviour in the High Court within the Website news forums, part of the SkyUser Announcements category; Virgin Media today filed legal proceedings in the High Court aimed at resolving its dispute with Sky surrounding Sky's withdrawal ...

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      Virgin Media Challenges Sky's Anti-Competitive Behaviour in the High Court

      Virgin Media today filed legal proceedings in the High Court aimed at resolving its dispute with Sky surrounding Sky's withdrawal of its "basic" channels from Virgin Media's TV service. The proceedings also seek a remedy for the onerous rates imposed by Sky for carriage of Virgin Media TV channels on Sky's own TV service.

      The proceedings are based on Section 18 of the UK Competition Act 1998 and Article 82 of the EC Treaty, both of which prohibit a company from abusing its dominant position. Sky, which accounts for almost 70 per cent of the country's Pay TV subscribers, is dominant in the UK Pay TV market and has engaged in a strategy to stifle competition by using its dominance against Virgin Media.

      In January, Sky forced Virgin Media TV to accept a reduction of approximately 85% in the fees that it pays for Virgin Media channels such as Living, Bravo and Trouble, despite a significant increase in the channels' popularity.

      In February, Sky attempted to double the fees Virgin Media pays for retailing Sky's basic channels on the Virgin Media network, despite a reduction in the channels' popularity of about 20 per cent over the last three years. When Virgin Media declined to pay such excessive charges because it would not be viable for it to do so, Sky refused to continue to supply its channels to Virgin Media. Sky has aggressively promoted the withdrawal as a reason for Virgin Media customers to switch to Sky.

      Sky demanded a price for its basic channels that was some 17 times greater than it was prepared to pay for the Virgin Media TV channels, even after adjusting for the Sky basic channels' marginally higher share of total viewership. This disparity in channel valuation is just one manifestation of Sky's systematic abuse of its dominant position and its longer term objective of suppressing existing and emerging competition from other companies.

      Sky has rejected an offer by Virgin Media to resolve these issues through legally binding arbitration by an independent expert.

      Commenting on the legal proceedings, Virgin Media CEO Steve Burch said:

      "This dispute is one very specific example of how UK consumers are being denied the benefits of a diverse, dynamic and competitive pay TV market. Litigation is obviously a serious step and a last resort but we are determined to have these issues resolved as quickly and fairly as possible."

      Press Release here: Virgin Media : Press Office : Press Release


      This thread is being discussed here:

      Virgin TV in BSkyB court action
      Last edited by NewsreadeR; 12-04-07 at 10:56 PM.


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