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The Commission, which began its investigation earlier this year, has concluded that Sky's stake in ITV would be "likely to lead to a substantial lessening of competition by giving it the ability to influence ITV’s strategy".
Last month the Commission announced the findings of the Inquiry would be delayed due to what it called "a complex reference dealing with both competition and media public interest considerations".
The Commission's chairman and chairman of the Inquiry Group, Peter Freeman, said: "The acquisition has made BSkyB ITV’s largest shareholder by some margin and whilst our provisional view is that this would not necessarily affect day-to-day operations, BSkyB would be able to influence ITV’s key strategic decisions, particularly relating to investment, whether in content, capacity or new technology."
The Commission argued that as Sky faces competition from ITV's free-to-air TV offer, Sky now has the ability and possibly the incentive to "take advantage of opportunities to weaken ITV or prevent it from taking actions that would threaten its interests".
However, the Commission also concluded that the acquisition will have "no adverse effect on the sufficiency of plurality".
Freeman added: "We do not think that this shareholding is sufficient to give rise to competition concerns in other areas we’ve looked at such as advertising and TV news provision. As far as the media public interest consideration is concerned, we do not think there is sufficient evidence that the acquisition will have an adverse effect, given the degree of influence that BSkyB has acquired over ITV, and ITN as its news provider, the regulatory requirements for impartiality and a strong culture of editorial independence in TV news".
Before delivering the full report to the Secretary of State for the Department for Business, Enterprise and Regulatory Reform, John Hutton, in January, the body will consult on possible remedies to address the matter, including possible divestment of the shareholding.
