Labour brands Sky warning a cop out

Labour’s broadcasting spokesperson Kris Faafoi and associate ICT spokesperson Clare Curran have labelled the warning given to Sky TV by the Commerce Commission over its contracts with content deliverers as a slap with a wet bus ticket.

“Sky TV is a monopoly broadcaster so it is extremely concerning that the Commerce Commission has found it may have entered into contracts that reduced competition,” Faafoi said in a statement. “The ruling is a cop out from the Commission. It is a kick in the guts to consumers.”

Last year the commission began investigating whether Sky had breached sections 27 or 36 of the Commerce Act. Section 27 makes it illegal to enter into contracts likely to substantially lessen competition in the market, while section 36 prohibits those with a substantial degree of market power from taking advantage of that position for anti-competitive purposes.

The commission found that certain provisions in Sky’s contracts with telecommunications retail service providers (ISPs and broadcasters that deliver content for pay TV services delivered via ultrafast broadband) were “likely” to have breached the Commerce Act, but says the breach is “unlikely to have the effect of substantially lessening competition” and is “unlikely to cause harm in the future”. 

“The Commission claims that Sky’s monopoly in the content market has not created harm,” said Curran. “Tell that to the telcos and broadcasters. They have said for a long time that barriers to content deals with providers such as Netflix and Hulu are preventing the growth of the industry which will drive uptake of ultra-fast broadband.”

Commission chairman Mark Berry said, “We believe that Sky entered into historical agreements with RSPs that had the purpose, effect, or likely effect of substantially lessening competition. “However due to market developments, the key commitments Sky has with RSPs are unlikely to continue to have the same effect. For example the new sports pay TV product from Coliseum and the recent exemption granted by Sky to Telecom to market this product.”

The commission says it will keep monitoring Sky’s contracts and said its decision didn’t stop other parties taking their own action.

John Fellet, Sky’s chief executive officer said, “The investigation has been a long and detailed exercise but we’re glad a robust decision making process has taken place.”

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