The proposed acquisition of Red Bee Media by Ericsson is to be referred to the Competition Commission.
A preliminary investigation by the Office of Fair Trading found the takeover could lead to an increase in prices for linear playout services.
Clive Maxwell, OFT Chief Executive and Decision Maker in this case said: “Not only is there the possibility of price rises as a result of the merger, there is a risk the most complex channels will suffer a reduction in quality in their service levels.”
Both parties offered behavioural remedies, but these were deemed as insufficient to meet the OFT’s concerns.
The former BBC Broadcast division has 1,500 staff in the UK and Australia. It was spun off from the BBC in 2005 and bought by a Macquarie-backed venture, specially established for the acquisition.
Red Bee maintains contracts with the BBC, as well as providing services for companies including Canal+, Chellomedia and Channel 4, amongst others. There are also facilities in France, Germany and Spain.
