Ofcom extends scope of BBC Broadcast competition case

Update to Ofcom Competition Bulletin recording that Ofcom has extended the scope of its investigation of a complaint against BBC Broadcast under the Competition Act 1998 (and the corresponding provisions of the EC Treaty).

When the case was opened in July 2005, Ofcom's investigation centred on BBC Broadcast's winning of contracts to provide "media access services", such as subtitling, to Channel 4 and Five. On 31 July 2005, the BBC sold BBC Broadcast to Creative Broadcast Services Limited (CBSL), a subsidiary of an Australian bank. As part of the acquisition, BBC Broadcast (now renamed Red Bee Media Limited) has a long-term agreement to supply services to the BBC. According to the OFT decision clearing the acquisition of BBC Broadcast, the parties have entered into a 10-year "Framework Agreement", under which the BBC exclusively outsources to CBSL the provision of services previously supplied to it by BBC Broadcast. The OFT considered that agreement not to be ancillary to the merger clearance. That agreement is now being investigated by Ofcom under Chapter I of the Act.

This Ofcomwatch post from July 2005 suggested that the original case of competition law infringement might be hard to prove, and suggested that there might be a quite separate case against BBC Broadcast under EC State aid law. But the current extension to Ofcom's investigation seems reasonable: there may well be reasons why such an exclusive supply agreement with the BBC is incompatible with the Act.

Filed under BBC, Media, Ofcom.

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