Virgin Media 2007 Annual Report Download - page 29

things, decisions on mergers are now made by the independent competition authorities, using
competition based tests, rather than by the U.K. Government.
Under other provisions of the Enterprise Act, individuals who cause, encourage, participate in or,
in some cases, even those who have knowledge of, the making of agreements between competitors
which are designed to fix prices, share markets, limit supply or production or rig bids in the U.K., can
be prosecuted and punished with unlimited fines and imprisonment for up to five years. The courts
may also order the disqualification for up to fifteen years of directors whose companies have
committed a breach of U.K. or EU competition law.
In addition, the Enterprise Act gives sector regulators such as Ofcom the ability to make a
‘‘Market Reference’’ to the Competition Commission where they have reasonable grounds to suspect
that any feature or combination of features of a market restricts or distorts competition. If a reference
to the Competition Commission is made on these grounds, the Competition Commission will carry out
a detailed inquiry and has wide-ranging powers to impose structural and behavioral remedies or both.
Pay TV Market Investigation
In January 2007, we made a joint submission to Ofcom with BT, Setanta Sport Holdings Limited
(Setanta) and Top Up TV Europe Limited (Top Up) indicating that there are a number of features of
the U.K. Pay TV market which result in competition being prevented, restricted or distorted and that
BSkyB is able to exploit these features to marginalize and even foreclose competitors at all levels of the
Pay TV market value chain.
Following this submission, Ofcom announced in March 2007 that it would be carrying out a study
of the UK Pay TV market to determine whether a reference to the Competition Commission was
appropriate. We made a further, more detailed, joint submission to Ofcom with BT, Setanta and Top
Up in July 2007. Ofcom published its consultation document in December 2007.
Ofcom will continue its study of the UK Pay TV market throughout 2008 before deciding whether
to make a referral to the Competition Commission. Ofcom cannot impose remedies itself (only the
Competition Commission has power to impose remedies under these provisions of the Enterprise Act)
but once Ofcom has decided that a referral to the Competition Commission is appropriate, it can
accept undertakings from parties such as BSkyB, which can be structural and/or behavioral in nature, to
remedy the competition problems in lieu of a referral to the Competition Commission.
WEEE Directive
On December 12, 2006, the U.K. government adopted the Waste Electrical and Electronic
Equipment Directive (the WEEE Directive) previously adopted by the European Union relating to
certain obligations associated with historical waste (as defined by the WEEE Directive). The WEEE
Directive became effective on January 2, 2007 and imposes the responsibility for the disposal of waste
electrical and electronic equipment on the manufacturers of such equipment. The main provisions
relate to separate collection, disposal and recycling; standards for its treatment at authorized facilities;
and collection, recycling and recovery targets. It requires distributors to allow consumers to return their
waste equipment free of charge, which would include the set-top boxes and cable modems that we
provide to our customers.
Corporate Responsibility
We regard corporate responsibility, or CR, as an important factor in the way we run our business.
During 2007, we challenged ourselves to gain a better understanding of the fundamental responsibilities
we owe to our stakeholders. Consequently, our approach to CR encompasses basic ethical questions
associated with our marketplace and workplace in addition to wider questions around social and
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