EC launches competition inquiry into BSkyB

LONDON - BSkyB is to be investigated by the European Commission, following complaints from rival ITV Digital that it is acting anti-competitively and abusing its position in the market.

The broadcaster has been asked to reply to 25 questions about its practices by Friday.

The inquiry is understood to be focusing on BSkyB's agreement with Discovery Communications, owner of the Discovery Channel, and Disney. The deal the broadcaster has with these programmers prevents them from signing up to ITV Digital -- in Discovery's case until 2006 -- although their channels can be carried on the NTL and Telewest cable networks.

The Commission, however, is said to be concerned because BSkyB only offers these channels as part of a package containing two movie channels. It is believed that rival ITV Digital has called for the investigation.

BSkyB faces a second investigation by the UK Office of Fair Trading after ITV Digital complained that it was prevented from carrying certain channels and, it claimed, because BSkyB was charging unfair prices for some of its subscription channels.

The complaints were launched in December and the inquiry had been expected to last six months. However, in June, the OFT announced that it would extend the inquiry.

Meanwhile, BSkyB is expected to report large losses on Thursday despite enjoying a substantial rise in subscriber numbers. Pre-tax losses are expected to widen to between £200m and £250m, compared with £129m last time.

BSkyB is expected to reveal subscriber numbers of 5.4m, up by 850,000 and 75,000 more than the last quarter.



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