BSkyB was handed a reprieve by the competition watchdog today after a ruling over the broadcaster's stranglehold on pay-TV movies was reversed.
The Competition Commission said the emergence of US-based internet movie service company Netflix meant Sky no longer had a material advantage.
In provisional findings last August, the watchdog said Sky's deals with six of the big film studios over the rights to films when they are first shown on television restricted competition and meant higher prices and reduced choice.
It prompted the Commission to suggest possible remedies, such as restricting the number of studios with which BSkyB can sign exclusive deals.
But the watchdog today said the launch of Netflix in January and rival Lovefilm's internet movie offering gave film-lovers alternatives to Sky.
The pair also have the rights to several other studios, including for movies such as the Twilight series and the recently-released The Hunger Games.
The inquiry added that Sky will launch its own internet-based service in the summer, branded as Now TV, which will offer Sky Movies without the need to take any other pay-TV content or subscribe to Sky's platform.
Laura Carstensen, who has led the investigation, said: "Competition between providers of movie services on pay TV has changed materially and, as a result of these changes, consumers now have much greater choice."
She added that competition in the wider pay-TV retail market was ineffective but that the year-long inquiry had been limited in its scope.
The Commission has requested responses to its revised provisional findings by June 13 before it issues its final verdict.
BT and Virgin Media led calls for the way the market is structured to be changed to allow them greater access.
Around one third of the UK's 15 million pay-TV viewers are estimated to subscribe to Sky Movies.
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