ONDIGITAL’s in-house legal team has won the first step in its campaign against BSkyB under the new Competition Act.
Herbert Smith’s client, satellite broadcaster BSkyB, is facing a full investigation from the Office of Fair Trading (OFT) on how it sells its sports and film channels to rival cable and digital broadcasters.
The in-house team at ONdigital has called in Clifford Chance to help argue the case.
The OFT investigation comes after repeated complaints from ONdigital about the prices BSkyB charges for its programmes. ONdigital is one of BSkyB’s biggest purchasers of programmes, but says the satellite broadcaster can affect the price that ONdigital has to charge customers for its own services when it negotiates contracts.
The legislation, which came into force in March, means that the OFT could fine BSkyB as much as 10 per cent of its UK turnover since March, which could be as much as £100m. It also allows the OFT to enter premises by force to take away documents.
This inquiry is the first investigation under the new OFT director general John Vickers.
Head of regulatory affairs at ONdigital Tim Lord says: “This is a very important point for our business. There’s not a huge amount of work so far that has been done by the external lawyers – if this is the type of work you want to do you have to go in-house, because that’s where you get close to the arguments.”
Clifford Chance head of competition Chris Bright has been instructed by ONdigital, while at Herbert Smith European and competition law partner Dorothy Livingston has scooped the work.
Both firms are long-standing advisers for the two clients. Lord says: “Clifford Chance have been our lawyers for a while. They’ve worked with us since we started up the busi-ness.” He says the company often works closely with corporate partner Daniel Sandelson at the firm.
Lord has been working closely with ONdigital’s director of legal and business affairs Marcus Ezekiel to encourage the OFT to bring the case.