Ofcom and OFT question Sky stake in ITV

Ofcom and the Office of Fair Trading (OFT) have completed separate investigations into BSkyB's acquisition of a 17.9 per cent shareholding in ITV, and both have raised concerns about the deal.

Ofcom stated that there are public interest issues in relation to " sufficient plurality of news provision" for both cross media and television news in the UK.

The OFT believes that the test for a merger reference to the Competition Commission has been met on competition grounds.

John Fingleton, chief executive of the OFT, said in a statement: "We have been asked by the Secretary of State to report on the competition issues raised by this transaction, and have concluded that this partial ownership link between two key players raises significant competition concerns.

"Sky's shareholding means that ITV is no longer fully independent, and this may alter the future competitive landscape, especially as we approach digital switchover.

"Given the high stakes for tens of millions of UK consumers, we believe these risks to competition merit further examination."

Ofcom is currently considering whether there has been change of control at ITV following BSkyB's partial acquisition, and whether there should be a review of certain ITV programming obligations.

Industry insiders have suggested that Sky's £1bn spend on ITV is a tactical move to prevent ITV from being acquired by partner-turned-rival Virgin Media.

The Ofcom and OFT reports and recommendations will be sent to Secretary of State of Trade and Industry Alistair Darling, who commissioned the investigations in February.

Darling has until 26 May to decide whether the case should be referred to the Competition Commission.

Ofcom and the OFT will publicly release their full reports only after Darling has made his decision.