Competition Commission
04 February 2009
News Release
05/094 February 2009
'PROJECT KANGAROO' - FINAL REPORT
The Competition Commission (CC) has decided to block the proposed video on
demand (VOD) joint
ITV plc (ITV) and Channel Four Television Corporation (C4)-UKVOD, also known as
'Project Kangaroo'. It has concluded that none of the other remedies proposed
could remove the threat to competition in the VOD market.
Peter Freeman, CC Chairman and Chairman of the inquiry group, said:
After detailed and careful consideration, we have decided that this joint
venture would be too much of a threat to competition in this developing market
and has to be stopped.
The case is essentially about the control of UK-originated TV content. VOD is an
exciting and fast-moving development in TV, which makes programmes previously
broadcast available to viewers at a time of their choice. The evidence we saw
showed that UK viewers particularly value programmes produced and originally
shown in the UK and do not regard other content as a good substitute.
BBC Worldwide, ITV and Channel 4 together control the vast majority of this
material, which puts them in a very strong position as wholesalers of TV content
to restrict competition from other current and future providers of VOD services
to UK viewers. We thought the joint venture parties would have an interest in
doing so, in order to make Project Kangaroo a success.
Without this venture, BBC Worldwide, ITV and Channel 4 would be close
competitors of each other. We thought that viewers would benefit from better VOD
services if the parties-possibly in conjunction with other new and/or already
established providers of VOD-competed with each other.
We considered very carefully a combination of measures aimed at removing the
wholesaling activities of the joint venture and safeguarding commercially
sensitive information, but we were not persuaded that these measures would
overcome the risk that membership of this joint venture would influence the
parties' commercial decisions, particularly in relation to the wholesaling of
VOD content.
We looked closely at the possible benefits to viewers which this joint venture
might bring. We found that these and other benefits could come just as well from
other projects that were less damaging to competition. We expect these
alternatives to be much more likely to develop in the light of our decision.
We are aware of the various important proposals coming from Ofcom and the
Digital Britain project regarding the future of public sector broadcasting and
the position of the three companies involved in this joint venture. None of the
proposals is specific or imminent. Our job has been to examine a specific
proposal for a particular new and developing market. The effects on compe tition
of other, future proposals for public service broadcasters have yet to be
examined.
In its final report, published today at www.competition-commission.org.uk, the
CC has confirmed its provisional finding that the joint venture is likely to
result in a substantial lessening of competition (SLC) in the supply of UK TV
VOD content at the wholesale and retail levels.
The CC published a notice of possible remedies to address the SLC in December
2008. These possible remedies included putting in place access remedies to
control the way that content is offered to other providers and/or making
material modifications to the terms of the joint venture. Other possible
measures have since been suggested by various parties, including a proposal by
the joint venture partners to remove the joint venture's ability to wholesale
content combined with measures to prevent the exchange of commercially sensitive
information.
Notes for editors
1. The CC is an independent public body which carries out investigations into
mergers, markets and the regulated industries.
2. The reference was made by the Office of Fair Trading (OFT) on 30 June 2008. The
CC extended the timetable for the inquiry in August, whilst it awaited important
information on details of the joint venture, which were still being negotiated
by the parties.
3. The Enterprise Act 2002 empowers the OFT to refer to the CC completed or
pro posed mergers for investigation and report which create or enhance a 25 per
cent share of supply in the UK (or a substantial part thereof) or where the UK
turnover associated with the enterprise being acquired is over GBP70 million.
4. The definition of merger includes a joint venture when two or more enterprises
cease to be distinct from each other.
5. Further information on the CC and its procedures, including its policy on the
provision of information and the disclosure of evidence, can be obtained from
its website at: www.competition-commission.org.uk.
6. Enquiries should be directed to Rory Taylor on 020 7271 0242 (email
rory.taylor@cc.gsi.gov.uk).
No comments:
Post a Comment