Competition Commission to examine Project Kangaroo

The Office of Fair Trading (OFT) has referred a joint video-on-demand venture between BBC Worldwide, ITV and Channel 4 to the Competition Commission (CC).

The OFT said Project Kangaroo would be the "largest and richest" source of UK TV content.

It said it would benefit consumers by letting them browse an online library of British TV comedy, drama and other material.

It would also let them watch video content on a free, download-to-rent or download-to-own basis.

However, it pointed out that the venture between the three broadcasters could enable Kangaroo to "charge higher prices in syndicating content to wholesale customers”.

It said this could potentially raise prices paid by video-on-demand customers and “limit the range of ways in which viewers can watch the parties' content on demand”.

In a statement, the OFT said: “While it is easy to speculate about what different UK viewers might do if the joint venture charged a higher price, there was a lack of good evidence available on these issues.”

Simon Pritchard, the senior director of mergers at the OFT, added: “Video on demand is a new and fast-growing consumer sector, and we should judge the issues on evidence rather than speculate about consumer behaviour.”

Over the next 24 weeks the CC will consider the issues and collect better evidence on the key concerns around the launch of Kangaroo.

Other websites in the UK that offer video on demand include Apple iTunes, BT, Joost, Tiscali and Virgin.