Ofcom backs Sky in sports ad dispute

BT’s ad campaign for BT Sport

UK regulator Ofcom has ruled that BSkyB has not breached its broadcast code in refusing to carry ads for BT’s new rival sports channels. 

Following a complaint lodged by BT earlier this year, Ofcom said today that Sky was not in breach of its code on the prevention of undue discrimination between broadcast advertisers.

In a 16-page document outlining its findings, Ofcom said that, in its view, “Sky is pursuing a legitimate commercial interest.” It added that “given the limited extent of the effects on BT” it believes that “Sky’s approach is proportionate.”

Commenting on the ruling, Sky’s group director of corporate affairs, Graham McWilliam, said: “We are pleased that Ofcom has confirmed that we are acting entirely reasonably in declining to advertise a direct competitor on Sky Sports. As we said at the time, BT’s demands are a bit like Tesco expecting to advertise inside Sainsbury’s.”

A BT spokesperson said: “With regulation you win some and you lose some. Whilst this decision has gone against us, we are delighted that Ofcom is going to investigate Sky over their refusal to supply us with Sky Sports on Youview. That is a far bigger issue for us than their refusal to show our ads so this has been a good week for BT in terms of regulation.”

Yesterday, Ofcom said it would launch a separate investigation into BSkyB’s practices in wholesaling its sports channels, after receiving a different complaint from BT in May on this issue.

The probe will focus on a claim by BT that the terms under which Sky offered its Sky Sports 1 and 2 channels to the YouView platform were an abuse of its market position. In particular, Sky is making the sale of the channels conditional on BT making its own sports channels available on Sky’s platform.

BT alleges that Sky has “refused to provide Sky Sports 1 and 2 to BT on YouView on fair terms whilst providing them to other pay TV retailers such as TalkTalk.”

However, Sky’s McWilliam dismissed the complaint as “entirely without merit.” He claimed: “BT has reinforced its reputation as a serial complainant by returning to the regulator about the supply of Sky Sports 1 and 2 to the YouView platform.

“Our position here is just as reasonable as in advertising. BT has itself been clear that it wants to be the exclusive seller of its own sports channels in order to shore up its broadband business. We simply want a level playing field whereby each company supplies its sports channels to the other so we can both offer our customers all Premier League football next season.”