Project Kangaroo (SeeSaw), the joint BBC, ITV and Channel 4 broadband Internet TV (IPTV) / Video-on-Demand (VOD) service, has been referred to the Competition Commission (CC) by the Office of Fair Trading (OFT). The move will trigger an investigation that could add further delays to Kangaroo's launch.
The original OFT investigation began earlier this month (news) and followed complaints from rivals Sky and Virgin Media, which feared that the service could allow several broadcasters to abuse their public service positions for an unfair competitive advantage:
Simon Pritchard, Senior Director of Mergers at the OFT, said: 'Video on demand is a new and fast-growing consumer sector, and we should judge the issues on evidence, rather than speculate about consumer behaviour.
We were in a position to clear the recent LoveFilm/Amazon merger, but that outcome would have been unsafe in this case because we lacked the evidence to make the right judgment. The CC, however, can start with our roadmap of the issues and ultimately decide what remedies, if any, are in fact required.'
Concerns arise because the concentration of these important and competing libraries of UK TV programming may give market power to the joint venture, enabling it to charge higher prices in syndicating content to wholesale customers, and potentially raise DTR and DTO prices paid by VOD consumers, or limit the range of ways in which viewers can watch the parties' content on demand.
The Competition Commission (CC) has set a deadline for the investigation of 12th December 2008.
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