[Media Boy UK]

ITV "is no longer fully independent" due to Sky's purchase of a 17.9% stake in the broadcaster, the Office of Fair Trading has advised the Secretary of State for Trade and Industry.

The OFT has also said that Sky's acquisition should be referred to the Competition Commission on the basis that "a relevant merger situation has been created";

"this situation has resulted, or may be expected to result, in a substantial lessening of competition within a market or markets in the UK";

and "clear cut remedies sufficient to resolve the OFT's competition concerns were not offered".The regulator further believes that Sky has the ability to "materially to influence the policy" of ITV.

"We have been asked by the Secretary of State to report on the competition issues raised by this transaction," said OFT chief executive John Fingleton.

"We 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."

News from Teletext.