On 26th October 2012, the Competition Appeals Tribunal (CAT) published a non-confidential version of its full judgement with respect to the appeals brought against Ofcom’s decision to impose a wholesale must-offer (WMO) remedy on Sky. The WMO remedy required Sky to wholesale its Sky Sports 1 and 2 channels to rival pay TV retailers at a price set by Ofcom. Sky, Virgin Media, BT and the Premier League lodged their appeals with the CAT in June 2010.
Sky appealed Ofcom’s decision to the CAT on the following three grounds (the first two relating to Ofcom’s jurisdiction and the third applying to Ofcom’s findings):
- Ofcom had no jurisdiction to take its decision or to intervene in the pay TV market because the focus was on retail competition and not “competition in the provision of licensed services or of connected services”;
- In identifying the competition concerns in respect of which it has imposed the WMO remedy, Ofcom had acted in breach of its obligations by failing to adhere to an approach based on competition rules laid down by EU law; and
- Ofcom’s findings in its decision in respect of Sky’s alleged practices, which formed the basis of Ofcom’s competition concerns and which the WMO remedy was designed to address, were unfounded.
In its judgement the Tribunal dismissed both of Sky’s jurisdictional grounds of appeal, taking the view that ‘competition in the provision of licensed services’ includes competition at the retail level and Sky’s interpretation of the relevant EU law was incorrect. It noted that, contrary to Sky’s views, Ofcom was not required to analyse the evidence specifically by reference to principles and case precedent.
However, the CAT did uphold Sky’s third ground of appeal noting that evidence from negotiations between Sky and rival retailers illustrate that Sky did, on the whole, engage constructively despite having a strong preference to self-retail.
Finally, the CAT did not find it necessary to consider grounds of appeal raised by other parties to the case, notably in respect of the terms of the WMO remedy.
DotEcon has been providing expert economic advice to a media client over the course of this appeal.