Regulators halt BBC's Kangaroo video service

Referred to the Competition Commission

Internet TV service Project Kangaroo has been referred to the Competition Commission by the Office of Fair Trading (OFT).

According to the OFT, the service, which is being created by BBC Worldwide in conjunction with ITV and Channel 4 to offer video content over the Internet, and eventually to television users as well, could potentially harm rivals and result in higher prices for consumers.

"In this case a lack of evidence meant that the OFT could not make a robust judgement as to whether the joint venture's future pricing (and non-price offer) would, in fact, be constrained by competition from other sources," the OFT said.

"As such, it is appropriate to refer this joint venture to the CC for further evaluation," the OFT added.

"We are naturally disappointed by the OFT decision and are frustrated that it will delay the launch of Kangaroo, but all parties remain committed to what the venture offers," said Project Kangaroo.

ITV chairman Michael Grade said: "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."

"As digital distribution gathers pace, we want to make our content available for free to online users in the most accessible way through Kangaroo," he added.

The Competition Commission now has 24 weeks to decide Kangaroo's future.

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