Kangaroo would restrict competition says Commission

Project Kangaroo, the online TV joint venture between BBC Worldwide, ITV and Channel 4 would restrict competition in the UK video-on-demand market, according to the Competition Commission.

The commission is launching a consultation outlining possible remedies to address the competition issue ahead of its final report in February.

Competition Commission chairman Peter Freeman says: “We are concerned that the loss of rivalry between BBC Worldwide, ITV and Channel 4, who are normally regarded as close competitors, could restrict existing and future competition for video-on-demand.”

However, it concludes that the venture would not substantially lessen competition for online advertising or content acquisition.

Remedies the commission has put forward for consultation include making “material modifications” to the structure of the joint venture, including limiting the terms of exclusivity between it and its partner companies or the scope of its activities. The way content is offered to other providers could also be controlled.

A joint statement from BBC Worldwide, ITV and Channel 4 says they “welcome” the commission’s recognition that UK video-on-demand has “much to offer”.

“We will continue to make the case for a service that will be both in vast majority free and non-exclusive, and of great benefit and value to British consumers,” the statement continues. They add that the suggested remedies are “not an exhaustive list” but a starting point for discussion.

Project Kangaroo was referred to the Competition Commission by the Office of Fair Trading in June over worries that the venture between the three broadcasters could enable Kangaroo to “charge higher prices in syndicating content to wholesale customers”. At the time, ITV executive chairman Michael Grade (pictured) questioned the delay said the most important interest was that of British viewers.

Last month chief executive Ashley Highfield resigned to become Microsoft’s managing director and vice-president of consumer and online UK. He joined in July from the BBC where as future media and technologies director he oversaw the development and launch of its iPlayer on-demand service.

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