The UK telecoms regulator Ofcom, and the Office of Fair Trading, the commercial watchdog, have jointly condemned the purchase of 17.9% of the leading independent UK broadcaster, ITV, by Rupert Murdoch’s News Corp owned BSkyB.
The satellite direct to home TV operator bought the stake to block a bid by Virgin Media to buy ITV at the tail end of last year. The regulators have told the UK government that the deal raises competition issues and have called for a Competition Commission investigation, which would have the power to reverse the deal.
The argument is that effectively ITV is no longer fully independent and this will result in a lower level of competition in the UK TV market. They might also have argued the same had Virgin Media been successful in its $10 billion bid to buy ITV outright.
ITV offers the most popular TV channels in the UK, with the exception of the BBC, and has been suffering of late in the search for advertising revenues, because the UK market has broadened considerably through Digital Terrestrial TV, and the creation of far more channels than existing advertising can profitably support.