Ofcom to pick over Murdoch's ITV stake

Trade and Industry minister Alastair Darling has asked Ofcom to investigate BSkyB's purchase of a 17.9 per cent stake in ITV. He wants the regulator to provide him with advice on whether the deal has public interest implications by 27 April. Ofcom said it is also looking at the possible impact on programming.

The Office of Fair Trading announced its own investigation in January into competition issues raised by the deal and will also report to Darling on 27 April.

Darling said: "I am today asking Ofcom to conduct an initial investigation into the public interest issues that may be raised by this transaction and to report back to me."

He went on to say: "I wish to emphasise that this decision only means there will be an initial investigation by Ofcom and is without prejudice to any decisions I take subsequently on whether a fuller investigation by the Competition Commission may be necessary."

In a written statement, Darling explained why he was sticking his oar in - ministers usually stay well away from merger regulations. The statement says: "As a general rule, Ministers have withdrawn from the regulatory consideration of mergers. However, having given careful consideration to the provisions of the relevant legislation and to the representations I have received, both from the parties directly concerned and from interested third parties, I believe that, in this case, it is appropriate for me to use the mechanism established by the Communications Act 2003 to ask Ofcom to conduct an initial investigation into the public interest issues that may be raised by this transaction."

BSkyB said the decision contradicted the government's own advice because the 2003 Communications Act recomended Sky could buy up to 20 per cent of another commercial broadcaster.

A BSkyB spokesman told The Guardian: "The secretary of state's action today contradicts the government's published guidance, which clearly sets out the circumstances in which intervention will be considered...We welcome, however, the secretary of state's emphasis that this is 'an initial investigation' that is made 'without prejudice' to any subsequent, substantive decision." BSkyB said it would cooperate fully with all agencies during the investigation. ®