Competition probe for Canvas

The UK Office of Fair Trading is to consider a Competition Commission referral for Project Canvas, the video-on-demand service lead by the BBC. Critics including BSkyB and Virgin Media will now be able to formalise their concerns in submissions to the OFT. The outcome of a further review of the project by the BBC Trust is awaited, it has previously said it saw only limited negative commercial impact on non-participants. Sky and Virgin Media have long argued that media regulator Ofcom should have conducted a market impact assessment of the proposed service.
The OFT, which is expected to launch a consultation asking for views on Project Canvas from the industry this week, will now seek to establish whether or not the venture reaches what is known as the "merger threshold" otherwise known as a competition test. Among these tests is whether Canvas is likely to account for 25 per cent+ of the nascent UK VOD market, and/or turnover 70 million (E78m) a year.
The consultation is expected to last for several weeks. The OFT will either clear Project Canvas of reaching the threshold for a formal competition investigation, ask the partners for some form of remedy to address concerns, or refer it to the Competition Commission.