The OFT has referred the jointly-held plans of the BBC, ITV and Channel 4 and their mooted Kangaroo service to the Competition Commission, sparking fury from the three UK players.
A joint statement on Kangaroo referral from BBC Worldwide, ITV and Channel 4 reads: “We’re naturally disappointed by the decision from the OFT and are frustrated that it will delay the launch of Kangaroo, however all parties remain committed to what the venture offers.
The OFT’s decision shows that the assessment of the proposed joint venture involves some very complicated issues. The parties are confident that when properly subject to more detailed scrutiny by the Competition Commission, the Competition Commission will conclude that the joint venture will provide wider choice for consumers and be seen as a pro-competitive force in the market place.
Once the Competition Commission process is complete, each broadcaster will liaise with its board for approval and BBC Worldwide will liaise with the BBC Trust for approval. Our aspiration is that Kangaroo will offer a wealth of British content and provide an example of UK innovation and collaboration for the benefit of consumers and advertisers alike.”
ITV’s executive chairman Michael Grade said: “While I understand that the Office of Fair Trading is carrying out its statutory obligations, there is a serious problem with a regulatory framework that seems unable to take the most important interest into account – that of British viewers.
The UK’s three biggest public service broadcasters together invest £2.5 billion per annum in original UK production, representing over 90 per cent of the total spend, as the recent Ofcom report highlighted. As digital distribution gathers pace, we want to make our content available for free to online users in the most accessible way through Kangaroo.
This venture has been delayed by a reference to the Competition Commission, at the very same time that non-UK companies like Google and Apple are free to build market dominating positions online in the UK without so much as a regulatory murmur.
There must be a level playing field for those of us whose investment sustains UK production. Companies without that commitment, who financially contribute virtually nothing to the UK creative economy, are trying to use a narrow regulatory remit to exploit our investment at little cost or risk to themselves. If they succeed, the losers will be UK viewers, UK advertisers and UK producers. Today’s ruling suggests that the regulatory framework does not seem to take that wider public interest sufficiently into account.
In the meantime, as joint shareholders in a ground-breaking venture we feel passionately about, we will engage in the continuing process with the Competition Commission”.