Virgin Media takes Sky spat to court

Cable broadcaster Virgin Media is suing rival satellite broadcaster BSkyB in the High Court claiming that its actions are anti-competitive. 

Virgin Media's case is based on the UK Competition Act 1998 and a European Union treaty, both of which prohibit a company with a dominant market position from abusing its power. 

The two companies fell out over charges for running Sky's basic TV package on Virgin Media's cable service, and Sky withdrew the channels completely.

Virgin Media is now alleging that its "abusive" rival engineered the split to use the loss of channels to hurt Virgin's subscriber numbers.

Virgin Media said that the bill to carry Sky's basic channels was set by Sky at £55m, twice the sum it had previously been paying.

Sky has denied the claims, stating that the increased costs were for a new package that included additional services.

As well as the loss of Sky channels such as Sky One and Sky Sports News from its service, Virgin Media also alleges that Sky is " imposing" low fees on the channels it buys from Virgin. 

Virgin Media's court filing states that Sky paid just under £36m in 2006 to carry Bravo, Challenge, Living and Trouble. 

However, Virgin Media claims that Sky tried to negotiate a new distribution deal that would originally have seen the satellite broadcaster pay nothing for those channels, with the eventual offer coming in at just £5m.

Virgin Media has also used the court filing to question Sky's decision to buy a 17.9 per cent stake in ITV, which effectively ended talks of a proposed merger between ITV and Virgin Media.

A ruling by comms watchdog Ofcom is expected on the ITV share question later today. 

A Sky spokesman stated that Virgin's claims were without foundation, and insisted that Sky had urged Virgin Media to return to negotiations, which it still sees as the best way to settle the matter.