Competition Commission says Kangaroo has to change plans

LONDON - The Competition Commission is looking at placing restrictions on Kangaroo, the video on demand (VOD) service due to be launched next year by the BBC, ITV and Channel 4, over fears that it will restrict competition in the supply of VOD services in the UK.

The commission revealed its concerns in its provisional conclusions published this morning.

It said it was concerned about the impact on viewers of the loss of rivalry between the three broadcasters who have formed Kangaroo - the BBC's commercial arm, ITV and Channel 4.

However, it said it did not think the venture would restrict competition in online advertising or content acquisition.

It focused on the fact that the broadcasting trio behind Kangaroo control most domestically produced video-on-demand content and the knock-on effect of this on competing services.

It is considering putting in place terms to ensure that Kangaroo does not license content to other suppliers on unfavourable terms, or "in the extreme", withhold content from them altogether.

It is also considering modifying the terms of the joint venture such as adjusting the scope of its activities or the terms of exclusivity between the joint venture and its parents.

Peter Freeman, the chairman of the commission and of the inquiry group, said: "The evidence that we have seen tells us that domestic content is key to being able to offer strong competition to UKVOD's [Kangaroo's] proposed service."

Following the commission's announcement the three broadcasters said they would continue to work towards launching the service next year and welcomed the commission's recognition that its service "clearly has much to offer".

They added that they intended to put forward alternative ideas to remedy the commission's concerns.

"These suggested remedies are not an exhaustive list. They represent possible options that the commission has identified as a starting point for discussion. We look forward to the dialogue on these and other potential remedies with the commission over the coming weeks."

The deadline for the commission's final report is February 8.

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