BSkyB facing legal threat over ONdigital

The liquidators of ONdigital, the failed TV venture better known as ITV Digital, are considering a claim for damages against BSkyB

The satellite TV group is a major creditor of ONdigital, owed some £38m for supplying Sky channels, and the liquidators have also been investigating whether this claim is valid.

The possible action is over alleged anti-competitive behaviour by BSkyB, although regulators have so far found in its favour. This week the creditors' committee, which includes Carlton, Granada, UKTV and Crown Castle, will meet the liquidators to discuss the potential for action. BSkyB is a member of the group but will not join the talks.

However, the prospect of getting cash from BSkyB was dealt a blow last week when the Office of Fair Trading revealed it had rejected an application from the liquidators and NTL, the cable television company, to review its decision to clear BSkyB of anti-competitive behaviour.

The two parties are reviewing their case before deciding whether to appeal to the Competition Appeal Tribunal. A spokesman for Grant Thornton, ONdigital's liquidators, would not comment on whether they would be recommending that creditors pursue the case against BSkyB. However, he said any action would only be taken with the creditors' sanction.

ONdigital went into voluntary liquidation late last year with liabilities of up to £1.2bn. Some £700mis down to potential claims for breach of contract from the likes of BSkyB and football clubs left high and dry by its collapse.

The OFT published the reasoning for its decision to reject claims against BSkyB last week. "ONdigital stated that the impact of BSkyB's conduct was such that the company in liquidation may have claims for damages against BSkyB," said the document. The damages would relate to any anti-competitive behaviour, although the OFT has not found any.

Last week, in its full-year results, BSkyB said it had received £5m from the liqui- dators. Pre-tax profits were £260m and sales £3.2bn.