UK Court of Appeal rules against Sky in wholesale sports battle

Editor | 18-02-2014

The near four-year saga regarding how much BT has to pay BSkyB to offer Sky Sports has been resolved by the UK Court of Appeal in favour of the telco.

In yet another blow by the new entrant to Sky’s dominance of the UK pay-TV arena, BT has won its appeal of a 2012 UK Competition Appeal Tribunal (CAT) ruling on how much it has to pay BSkyB to offer the popular sports channel.

The issue dates back to 2010 when UK regulator Ofcom ruled that BSkyB had to discount the price it charged other UK pay-TV platforms — notably Virgin Media cable TV and the BT Vision IPTV service — to offer the key Sky Sports packages. Indeed Ofcom set a wholesale price 23.4% cheaper than the then current benchmark. Not surprisingly Sky took Ofcom to court and on 8 August 2012 the CAT ruled that Ofcom’s competition concerns in relation to the wholesale supply of Sky Sports were unfounded. Moreover, the CAT concluded that the commercial terms of supply of the time, particularly in relation to Sky’s wholesale rate card, did not obstruct fair and effective competition in the retailing of Sky Sports across platforms.

Summing up the rejection of Sky’s case, Lord Justice Aikens said: "There remain significant, independent, competition concerns based on the rate-card price and penetration discount, as found by Ofcom …The reasons that the CAT gave for not considering that matter further were inadequate. I would propose that the matter be remitted to the CAT for further consideration in order that further findings and conclusions may be made in the light of this judgment."

Offering its comment on the appeal, Ofcom said that it welcomed the Court of Appeal’s decision. In a statement it remarked: “Ensuring fair and effective competition in the pay-TV market has always been Ofcom’s objective. Ofcom’s 2010 decision that Sky must offer premium sports channels to other providers was designed to deliver choice and innovation to consumers through greater competition.”