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Virgin Media to challenge Sky in the High Court
# 12 April 2007, 18:18 by Cable Forum
Virgin Media have announced today that is has filed for court proceedings against Sky. As we announced last week, Sky had apparently sent a letter to Virgin Media, which basically outlined that Sky had rejected the cable groups complaints and that they had also found them unfounded. Virgin Media now hope to settle dispute in the High Court. The dispute surrounds Sky’s withdrawal of its “basic” channels and abuse of its market dominance.
Virgin Media also hope to seek resolvement regarding their other issue about the rates that were imposed by Sky for carriage of Virgin Media TV channels (Living, Trouble – Bravo… etc) on Sky’s own TV service.
Virgin Media say the High Court proceedings are based on Section 18 of the UK Competition Act 1998 and Article 82 of the EC Treaty. Both of these prohibit a company from abusing its dominant position. Virgin Media firmly believes Sky are in breach of the above by engaging in stifling the competition, mainly Virgin Media.
Sky did appear to act aggressively towards the end of last year, they blocked any chance of Virgin Media acquiring ITV, by purchasing a 17.9% stake in ITV, they also appeared to buy up some advertising space, to scupper Virgin Media’s opportunity to mass advertise their rebranding.
Virgin Media had wanted their dispute with Sky to be resolved amicably by an independent body (arbitration). Virgin Media had suggested the move but Sky had rejected the calls for arbitration, thus, the end result is what we are seeing now.
Virgin Media had stated on March 5th, that they were giving Sky 30 days before starting court proceedings. That deadline has now passed and no deal was reached for Sky’s basic channels to return to Virgin Media TV services.
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.”
Sky have responded back with today’s announcement, BskyB chief operating officer, Mike Darcey had said:-
“This action is without foundation and is an obstacle to bringing back Sky’s basic channels for Virgin Media customers.
The best and quickest way to give customers what they want is to resume negotiations and we’ve invited Virgin Media to return to the table. Virgin Media is also insisting on reopening a previous deal for its channels on the Sky platform, even though this has absolutely no relevance for cable viewers. Increasingly, customers will ask whether Virgin Media is putting its own financial interests before giving them the service they want.”