BSkyB, the UK's largest pay-TV broadcaster, faces a competition inquiry launched this week by the Office of Fair Trading (OFT).

The probe, expected to take six months, is to focus on BSkyB's supply of wholesale pay-TV to its rivals - known as bundling. If found guilty, the broadcaster could be fined up to 10% of turnover backdated to March and face compensation claims for economic loss from rivals such as ONdigital, the digital terrestrial service of Carlton Communications and Granada Media.

The move comes after new legislation came into force in March giving the OFT tougher powers. The OFT said it had opened the investigation because it had "reasonable grounds to suspect that there may have been breaches of the provisions of the new Competition Act".