10 August 2007
Office of Fair Trading (OFT) officials are to investigate whether a tie-up between BSkyB and Amstrad would unfairly compromise competition in the television technology market, it has been revealed.
Sky announced plans to buy Amstrad, owned by Sir Alan Sugar, in a £125 million deal at the end of last month.
Currently, the computer and electronic hardware producer supplies Sky with 30% of the set-top boxes that Sky purchased last year for its pay-TV customers.
The firm generates around 75% of its total revenues from the sale of set-top boxes to BSkyB.
However the OFT has stated that it will examine whether the deal will result in a "substantial lessening of competition" as other digital TV providers could be missing out.
The news follows an existing probe into Sky's 17.9% share in ITV by the Competition Commission.
In November Sky moved in and won a £940 million deal to buy the shares in ITV, while rival Virgin Media was left empty-handed.