Kangaroo 'will limit competition'

The Competition Commission (CC) has published its initial findings into Project Kangaroo, a proposed online video-on-demand service to be jointly operated by the BBC, ITV and Channel 4.

Formerly known as the Monopolies and Mergers Commission, the CC has decided that Kangaroo "will restrict competition in the supply of VOD services in the UK".

"We are concerned that a loss of rivalry between BBC, ITV and C4, who are normally regarded as close competitors, could restrict existing and future competition for video-on-demand," said Peter Freeman, chairman of the CC's inquiry group.

However, the CC did say that there was still hope for the project and suggested "adjusting the scope of the joint venture’s activities or the terms of exclusivity".

A joint statement from the parties involved in Project Kangaroo tentatively welcomed further discussions aimed at working around the CC's concerns.

"We will continue to make the case for a service that will be both in the vast majority free and non-exclusive, and of great benefit and value to British consumers," the statement read.

"We look forward to the dialogue on these and other potential remedies with the Commission over the coming weeks," it continued.

Despite the tone of the statement, it is undoubtedly another blow for Project Kangaroo, which saw chief executive Ashley Highfield leave after barely six months in the job.

Kangaroo was reported to the CC back in June, a move which incensed Sir Michael Grade, chairman of ITV, who questioned the role of online companies such as Google, owners of YouTube, in restricting competition in the market.

"[Kangaroo] 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," Grade said at the time.

www.competition-commission.org.uk

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