Virgin may go to court over Sky

VIRGIN Media may press for a judicial review of the Competition Commission’s decision not to penalise Sky for its control of the pay-TV market for Hollywood blockbusters.

As revealed by Financial Mail last week, the commission has performed a U-turn in its long-running investigation into Sky’s control of the market for film premieres on pay-TV.

In a reversal of its previous provisional judgment, the commission announced its revised provisional decision last week that the arrival of LoveFilm and Netflix offering films online to subscribers showed that Sky no longer had a material advantage over its rivals, which include Virgin Media and BT.

Other providers now have a consultation period until June 13 to respond to the decision.

The commission is understood to be legally obliged to publish its final report within two years of the start of its investigation, which will be August 3.

The highly unusual reversal of its previous findings has shocked other pay-TV suppliers, which are now considering their responses.

A spokesman for Virgin Media said: ‘The commission said consumers are losing out to the tune of £50 million to £60 million a year because of Sky’s exclusive hold on movie rights from six major Hollywood studios. That has not changed. We are considering all options and a judicial review would be one.’

The commission said LoveFilm and Netflix had already acquired the same kind of rights from several smaller studios, including those responsible for films such as the Twilight series and the recently released hit The Hunger Games.

Sky’s rivals are sceptical that the commission would change its mind for a second time, said one supplier, especially in view of the limited time available for the commission to publish its final verdict.

Some major pay-TV suppliers are considering asking regulators to act on its finding that ‘competition in the pay-TV retail market overall is ineffective’.

However, the current investigation has taken five years and other suppliers appear to have little appetite for a further full-blown probe.

BT said: ‘We will make our arguments against the commission’s decision during the next consultation period, which ends on June 13.’