Competition
The Charter and Agreement place duties on Ofcom to consider the impacts of the BBC’s activities on fair and effective competition.
As a large publicly-funded organisation, the BBC inevitably has an impact on competition in the wider media market. It may have a positive effect by increasing choice or encouraging sector wide innovation, for example. But in fulfilling its objectives, the BBC may also harm the ability of others to compete effectively.
Ofcom’s role is to assess the impact of the BBC’s activities on competition. We have developed rules relating to different areas of BBC activity that could lead to competition concerns and guidance to explain the tools we will use to protect fair and effective competition in the areas that the BBC operates.
Policy and guidance
We have undertaken work on our approach to assessing the BBC’s compliance with the commissioning requirements set out in Schedule 3(7) of the Agreement which apply to the BBC’s television, radio and online public services. Schedule 3(7) requires the BBC to increase the amount of programmes it commissions following a contestable process between producers on fair and reasonable terms.
You can read the full statement that sets out our decision on whether additional regulation is needed in this area.
Regulating the BBC’s impact on competition (PDF, 139.2 KB)
This document provides a general overview to our approach to BBC competition regulation.
Procedures for enforcement of BBC competition requirements
We have consulted on the procedures we would expect to follow in our enforcement of these competition requirements, including how we would expect to handle complaints, carry out investigations and impose sanctions. We published our final procedures on 28 June 2017.
The BBC may only carry out commercial activities through subsidiary companies. The BBC’s commercial subsidiaries generate returns which can be reinvested in BBC programmes and services and supplement income from the licence fee.
The BBC Charter and Agreement require both the BBC and Ofcom to ensure that the relationship between licence-fee funded services and commercial activities does not distort competition. We have therefore put in place requirements on the BBC to ensure that the commercial activities do not, as a result of their relationship with the BBC Public Service, trading activities or non-service activities, distort the market or create an unfair competitive advantage.
More information about our work in this area can be found - Overview of Ofcom's work regarding the BBC's commercial and trading activities.
Distribution of BBC public services: Ofcom’s requirements and guidance (PDF, 159.7 KB)
This document explains how we will consider specific competition concerns about the way the BBC distributes its public services, taking into account the need for the BBC to fulfil its Mission and Public Purposes.
This document explains how we will assess whether the public value of a change proposed by the BBC to its public service activities justifies any adverse impacts on fair and effective competition.
Assessing the impact of the BBC’s public service activities: Ofcom’s procedures and guidance (PDF, 356.1 KB) (Updated on 10 October 2018 to correct cross-referencing error at paragraph 4.15.)
This document explains how we will assess whether an existing BBC public service activity is having a significant adverse impact on fair and effective competition. This includes an assessment of whether the public value of the service justifies any adverse impacts on fair and effective competition.
The Charter and Agreement place duties on Ofcom to consider the impacts of the BBC’s activities on fair and effective competition.
This section gathers together consultations, regulatory statements, news releases and other useful information relating to competition. It covers the period from September 2016 when the draft Charter and Agreement were published, until 3 April 2017 when the transfer of regulation became effective.
Regulating the BBC’s impact on competition (PDF, 139.2 KB)
This document provides a general overview to our approach to BBC competition regulation.
Statement: Regulating the BBC’s impact on competition: Statement on requirements and guidance. In this statement, we summarise the comments we received in response to the requirements and guidance we proposed in December 2016 setting out how we intended to regulate the BBC’s impact on competition. We set out our responses to those comments and explain the amendments we have made to the requirements and guidance as a result. This statement was published on 29 March 2017.
Statement: The BBC’s trading activities: Statement on Ofcom’s requirements and guidance. In this statement, we consider the requirements we proposed to place on the BBC to protect fair and effective competition in how it carries out its trading activities in the light of the responses to our consultation.
Statement: Procedures for enforcement of BBC competition requirements. We have consulted on the procedures we would expect to follow in our enforcement of these competition requirements, including how we would expect to handle complaints, carry out investigations and impose sanctions. We published our finalised procedures on 29 June 2017.
Assessments
Ofcom has published a letter to the BBC and Radiocentre (PDF, 174.8 KB) concerning BBC Radio 1’s Relax stream.
When the BBC plans to make any changes to its public service activities, it is first required to consider whether this represents a ‘material’ change. The launch of a new public service, or where a change may have a significant adverse impact on fair and effective competition, is considered material.
In this case, we agree with the BBC’s determination that the proposed Radio 1 Relax stream does not constitute a material change. We consider that the impact on competitors’ services is likely to be low, particularly given that the uptake of the Radio 1 Relax stream has been modest and that we do not consider it is likely to grow substantially in the future. We will not, therefore, require the BBC to conduct a public interest test.
Ofcom has published a letter to the BBC concerning BBC Radio 1’s Dance stream.
When the BBC plans to make any changes to its public service activities, it is first required to consider whether this represents a ‘material’ change. The launch of a new public service, or where a change may have a significant adverse impact on fair and effective competition, is considered material.
In this case, we agree with the BBC Board’s determination that the proposed Radio 1 Dance stream does not constitute a material change. The impact on competitors’ services is likely to be low, particularly given Radio 1 Dance will be online only and contain no new or exclusive content. We will not, therefore, require the BBC to conduct a public interest test and it is now able to launch the service on BBC Sounds as planned in early October.
However, BBC Sounds is a vital part of the BBC’s audio proposition and further changes to it have been signalled by the BBC. We therefore consider now is the right time to consider its market position.
We intend, through a public process, to seek evidence from interested or potentially affected parties in relation to the competitive impact of BBC Sounds. As part of this process, we will also seek to understand the BBC’s future strategy for Sounds. We expect to complete this work by the end of 2020.
Materiality assessment of BBC Radio 1’s Dance stream (PDF, 255.0 KB)
Ofcom review of proposed BBC Scotland television channel
This statement sets out our final decision to approve the launch of a new BBC television channel for audiences in Scotland.
Materiality Assessment of the BBC’s Proposed Change to the BBC iPlayer: summary (PDF, 302.6 KB)
The BBC proposed a number of changes to the BBC iPlayer and provided its plans to Ofcom for consideration.
In order to protect fair and effective competition in the TV sector, Ofcom examined whether changes which the BBC wished to make to its licence fee-funded TV, radio and online services were significant enough to merit detailed scrutiny.
Ofcom decided that the BBC’s proposed iPlayer changes were material, and that the BBC should conduct a ‘public interest test’ to properly assess their value and potential impact on other broadcasters.
Following representations from the BBC – including on the confidentiality of any information in our decision – we published our full decision, redacted for confidentiality, and final interim directions to the BBC.
BBC iPlayer Final Interim Directions (non-confidential) (PDF, 164.0 KB)
In September 2018, Wireless asked Ofcom to initiate a BBC Competition Review into how BBC Radio acquires sports rights. We have reviewed Wireless’ submission against our published guidance, which sets out the basis for launching such a review. We have decided it would not be appropriate to open a competition review at this time. We will continue to observe the sports radio sector and track the future acquisition of sports rights by BBC Radio and Wireless.
BBC iPlayer Competition Assessment: Consultation on Ofcom’s provisional determination (PDF, 1.5 MB)
BBC iPlayer Competition Assessment: Final determination (PDF, 813.3 KB)
We have concluded that the BBC can proceed with planned changes to BBC iPlayer, subject to certain conditions and guidance.
The BBC has proposed to launch a BBC Three broadcast channel. It has consulted and subsequently carried out a public interest test on its plans.
As required by the BBC Charter and Agreement, we carried out a competition assessment. We have reviewed how the BBC has developed its proposals and its assessment of their public value, as well as assessed the impact of the BBC’s proposals on competition. We consulted on our provisional determination (PDF, 888.2 KB) that the BBC could go ahead with its plans, and have taken account of feedback from stakeholders in response.
We have concluded in our final determination (PDF, 896.1 KB) that the BBC may proceed with its proposal.
Ofcom has published a letter to the BBC concerning trials that are being carried out on BBC Sounds.
When the BBC plans to make any changes to its public service activities, it is first required to consider whether this represents a ‘material’ change. The launch of a new public service, or where a change may have a significant adverse impact on fair and effective competition, is considered material.
In this case, we agree with the BBC’s determination that the trials taking place on BBC Sounds do not constitute a material change. We consider that the relatively small scale of the changes and the fact that they are for a limited time period mean they are unlikely to have an impact on competitors' incentives to invest and compete in the market. We will not, therefore, require the BBC to conduct a public interest test.
Letter in response to BBC's materiality assessment of BBC Sounds trials (PDF, 154.6 KB)