The investigation follows an initial assessment by the Director General of Fair Trading (DGFT) into the venture. The BSkyB and Ladbrokes partnership hopes to combine technology, management and marketing functions “to develop the growing demand for interactive, internet and telephone gaming and betting.”
Trade & Industry Secretary, Patricia Hewitt said that the DGFT’s examination found the scheme “raised concerns which warrant reference to the Competition Commission.”
The Commission has two distinct functions, to inquire into and report on matters referred to it by the other UK competition authorities concerning monopolies, mergers and the economic regulation of utility companies and to hear appeals against decisions of the DGFT.
The partnership between BSkyB and Hilton, which owns Ladbrokes, was proposed in July in an effort to exploit the opportunities presented by interactive TV. David Michels, Hilton CEO explained;
“This partnership means Ladbrokes and BSkyB will be the first companies in the world to develop betting via interactive television to its full potential.”
Effectively, viewers would be able to access their betting accounts via telephone, WAP phone, internet and television.
In response to the investigation Michels stated his optimism that the venture would satisfy competition law requirements.
“The at-home betting market is highly competitive and there are already a number of interactive betting operations that would compete strongly.”
Fair trading laws allow ventures to be referred to the Commission if they “create or increase a market share of 25% of the supply of particular goods or services” or, “involve the takeover of assets worth more than £70m.”