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The Football Associaton Premier League; British Sky Broadcasting Limited

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The Football Associaton Premier League; British Sky Broadcasting Limited Neutral citation [2012] CAT 20 IN THE COMPETITION Cases No: 1156-1159/8/3/10 APPEAL TRIBUNAL Victoria House 8 August 2012 Bloomsbury Place London WC1A 2EB Before: THE HONOURABLE MR. JUSTICE BARLING (President) PROFESSOR JOHN BEATH MICHAEL BLAIR QC Sitting as a Tribunal in England and Wales BETWEEN: BRITISH SKY BROADCASTING LIMITED VIRGIN MEDIA, INC. THE FOOTBALL ASSOCIATION PREMIER LEAGUE BRITISH TELECOMMUNICATIONS PLC Appellants / Interveners - v – OFFICE OF COMMUNICATIONS Respondent - and - TOP UP TV EUROPE LIMITED RFL (GOVERNING BODY) LIMITED THE FOOTBALL ASSOCIATION LIMITED FREESAT (UK) LIMITED RUGBY FOOTBALL UNION THE FOOTBALL LEAGUE LIMITED PGA EUROPEAN TOUR ENGLAND AND WALES CRICKET BOARD Interveners Heard at Victoria House between 9 May 2011 and 15 July 2011 ___________________________________________________________________ JUDGMENT (Non-confidential version) ___________________________________________________________________ APPEARANCES Mr Mark Hoskins QC and Mr Gerard Rothschild (instructed by Ashurst LLP) appeared for Virgin Media, Inc. Miss Helen Davies QC, Miss Maya Lester and Mr Richard Blakeley (instructed by DLA Piper UK LLP) appeared for The Football Association Premier League. Mr James Flynn QC, Mr Meredith Pickford and Mr David Scannell (instructed by Herbert Smith LLP) appeared for British Sky Broadcasting Limited. Mr Thomas Plewman SC, Miss Sarah Ford and Miss Sarah Love (instructed by BT Legal) appeared for British Telecommunications Plc. Miss Dinah Rose QC, Mr Kieron Beal, Mr Josh Holmes, Miss Jessica Boyd and Mr Ben Lask (instructed by the Office of Communications) appeared for the Office of Communications. Mr Paul Harris QC and Miss Fiona Banks (instructed by the Legal Department, RFL, the Legal Department RFU, Bird & Bird LLP, Onside Law, Denton Wilde Sapte LLP) appeared respectively on behalf of RFL (Governing Body) Limited, Rugby Football Union, The Football Association Limited, PGA European Tour and the Football League Limited. Mr Daniel Beard QC (instructed by Milbank, Tweed, Hadley & McCloy LLP) appeared on behalf of Top Up TV Europe Limited. Mr Timothy Ward QC (instructed by SJ Berwin LLP) appeared for Freesat (UK) Limited. Miss Marie Demetriou (instructed by DLA Piper UK LLP) appeared for the England & Wales Cricket Board. Notes: (1) Excisions in this judgment marked “[…][C]” relate to passages excluded having regard to Schedule 4, paragraph 1 to the Enterprise Act 2002 (2) Text in the judgment surrounded by square brackets and marked “[C (substituted text)]”, has been substituted in this non-confidential version of the judgment, having regard to Schedule 4, paragraph 1 to the Enterprise Act 2002. TABLE OF CONTENTS I. INTRODUCTION AND SUMMARY ......................................................................................... 7 The contested decision .................................................................................................................... 7 The appeals ..................................................................................................................................... 8 Sky’s application for interim relief ................................................................................................. 9 The hearing of the appeals and certain procedural matters ........................................................... 9 Summary of the grounds of appeal and of the Tribunal’s conclusions ......................................... 11 Sky and FAPL’s challenges to Ofcom’s jurisdiction: Tribunal’s conclusions ......................................... 11 (i) The “licensed and connected services” argument ..................................................................... 11 (ii) The competition argument ........................................................................................................ 12 Sky’s challenge to the findings on which Ofcom’s competition concerns are based: the Tribunal’s conclusions ............................................................................................................................................... 13 Ofcom’s challenged findings .............................................................................................................. 13 Sky’s challenge to Ofcom’s findings .................................................................................................. 15 Tribunal’s conclusions on Ofcom’s core competition concern ........................................................... 15 Tribunal’s conclusions on Ofcom’s concerns relating to the cable companies ................................... 17 (i) Current wholesale prices .......................................................................................................... 17 (ii) HD, interactive and IPTV ......................................................................................................... 18 Strategic incentives ............................................................................................................................. 18 Ofcom’s exercise of its judgment on certain issues – Tribunal’s approach ........................................ 19 Consequences of the Tribunal’s conclusions ................................................................................ 19 Other appeals and grounds of appeal........................................................................................................ 19 Directions and other relief ........................................................................................................................ 20 II. OFCOM’S INVESTIGATION AND THE STATEMENT ..................................................... 20 The joint complaint, the Picnic proposal, and Ofcom’s investigation .......................................... 20 Summary of the Statement ............................................................................................................. 22 III. THE PARTIES’ GROUNDS OF APPEAL ......................................................................... 25 Sky’s main contentions .................................................................................................................. 25 FAPL’s main contentions .............................................................................................................. 27 BT’s main contentions ................................................................................................................... 29 VM’s main contentions ................................................................................................................. 29 The structure of the remainder of the judgment ............................................................................ 30 IV. THE TRIBUNAL’S ROLE ................................................................................................... 31 Sky and FAPL submissions ........................................................................................................... 32 Ofcom submissions........................................................................................................................ 33 BT submissions ............................................................................................................................. 34 The Tribunal’s discussion and conclusions .................................................................................. 35 V. GROUNDS OF APPEAL RELATING TO OFCOM’S JURISDICTION UNDER SECTION 316 ....................................................................................................................................... 41 Relevant statutory provisions ........................................................................................................ 41 The “licensed and connected services” ground of appeal ............................................................ 41 Licensed services ..................................................................................................................................... 43 The Tribunal’s discussion and conclusions ......................................................................................... 47 Connected services ................................................................................................................................... 50 The “competition” ground of appeal ............................................................................................ 52 3 The Tribunal’s discussion and conclusions .............................................................................................. 61 VI. SKY’S CHALLENGE TO THE FINDINGS ON WHICH OFCOM’S COMPETITION CONCERNS ARE BASED .................................................................................................................. 66 A. INTRODUCTION.................................................................................................................... 66 Background to the negotiations .................................................................................................... 75 B. NEGOTIATIONS WITH TUTV .............................................................................................. 82 Discussions in 2003-2004 ............................................................................................................. 83 Discussions in 2005-2006 ............................................................................................................. 83 Further contact between TUTV and Sky in 2007 .........................................................................
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