OFT starts formal BSkyB-ITV probe

BSkyB bought its ITV stake in November

The Office of Fair Trading (OFT) has confirmed that it has started a formal investigation into BSkyB's £940m purchase of a 17.9% stake in ITV.

The watchdog said it would study whether BSkyB's 17 November move had resulted "in a substantial lessening of competition" within the TV sector.

Analysts said BSkyB's decision to buy into ITV was an apparent move to block a bid for the firm from its rival NTL.

BSkyB said it noted the OFT's comments and would respond "in due course".

Part of Rupert Murdoch's media empire, BSkyB insists it has done nothing wrong by buying into ITV.

'Serious competition issues'

A spokeswoman for the OFT said it remained to be seen whether its investigation would result in it making any recommendations to the Competition Commission for action.

The launch of a formal probe comes a month after the OFT asked ITV and BSkyB for further information on the deal.

Cable broadcaster NTL first announced that it was interested in merging with ITV on 9 November.

It then withdrew its interest on 6 December, saying that any deal was now not likely to be attained on "acceptable terms", and that it had complained about BSkyB's move.

NTL said it thought BSkyB's purchase of a share in ITV raised "serious competition issues".

Yet current UK media ownership rules mean BSkyB is only prevented from controlling more than 20% in ITV.

The OFT has now invited interested third parties to submit their views.