Complainant: Independent Media Support Group Plc ("IMS")
Complaint against: BBC Broadcast ("BBCB")
Case opened: 13 July 2005
Case closed: 30 May 2007
Issue: allegations of market foreclosure and predatory pricing
Relevant instrument: Chapter I of the Competition Act 1998 ("the Act") and Article 81 of the EC Treaty (anti-competitive agreements) and Chapter II of the Competition Act 1998 and Article 82 of the EC Treaty (abuse of a dominant position)
Update note – 4 June 2007
Non-confidential versions of Ofcom's decision documents are now available at the links below.
End of update note
Ofcom has concluded that BBCB (now named Red Bee Media) is not dominant in the market for the supply of access services to UK television broadcasters. On that basis, Ofcom concludes that there are no grounds for action in relation to the Chapter II/Article 82 allegations that BBC Broadcast abused a dominant position by means of predatory pricing in relation to the Channel 4 contract and that it abused a dominant position by foreclosure in the relevant market as a result of the length and exclusive nature of the Channel 4 contract.
Ofcom has also concluded that the Channel 4 contract does not appreciably restrict competition and therefore there are no grounds for action in relation to the Chapter I/Article 81 allegation.
Following a reduction in the duration of the BBC contract, in light of other priorities, Ofcom has decided not to commit further resources to conclude its analysis of the reduced contract length under Chapter I of the Act/Article 81 and has accordingly closed its file on this part of the case.
Non-confidential versions of Ofcom's decision documentation will be published shortly.
Update note - 15 December 2005
Since publication of the original Competition Bulletin entry, BBCB has been acquired by Creative Broadcast Services Limited ("CBSL"), a subsidiary of the Macquarie Bank Group, and renamed Red Bee Media Limited.
In addition to the allegations described below, IMS's original complaint also contained an allegation related to the acquisition of BBCB by CBSL, namely that BBCB's exclusive contract to provide the BBC with media access services (the "BBC contract") is a breach of Chapter I of the Act because it prevents, restricts or distorts competition.
Ofcom excluded this allegation from the scope of its original investigation, because the Office of Fair Trading ("OFT") was considering whether the broader Framework Agreement, of which the BBC contract is a term, was an ancillary restraint directly related and necessary to implement the merger, as part of its decision on whether to refer the merger to the Competition Commission. On 11 November 2005 the OFT published its decision, clearing the acquisition and declaring that the Framework Agreement was not an ancillary restraint.
Ofcom has now added the consideration of whether the BBC contract infringes Chapter I of the Act and/or Article 81 of the EC Treaty into the scope of its investigation.
End of update note
Text published when case was opened
IMS is a supplier of media access services to broadcasters, film and DVD distributors, advertisers and advertising agencies. Media access services are services, including subtitling, audio-description and signing, which are designed to meet the needs of individuals who are deaf or hard of hearing or blind or partially sighted. Public service broadcasters are obliged to meet certain media access targets (in terms of percentage of broadcast hours) in accordance with the Ofcom Code on Television Access Services which is issued pursuant to sections 303 to 305 of the Communications Act 2003.
BBCB is a subsidiary of the BBC; one area of its business is the provision of media access services.
IMS's complaint relates to an agreement between BBCB to provide media access services to Channel 4. IMS alleges that:
As set out in section 25 of the Act, Ofcom may conduct an investigation if it has reasonable grounds for suspecting that the Chapter I or Chapter II prohibitions have been infringed. In addition to these prohibitions, Ofcom also has the power to apply Articles 81 and 82 of the EC Treaty in full.
Ofcom has now opened an investigation into the allegations made and will consider whether or not BBCB has infringed Chapter I and/or Chapter II of the Act and/or Article 81 and/or Article 82.
Case Leader: Selena Bevis ( e-mail:Selena.Bevis@ofcom.org.uk)
Case Reference: CW/00842/06/05