The Office of Fair Trading (OFT) has concluded that Project Canvas does not qualify for investigation under the merger provisions of the Enterprise Act 2002.
The OFT said that Canvas does not qualify as a merger because none of the JV partners (including the BBC) is contributing a pre-existing business (‘enterprise’) to the Canvas JV.
Unlike in the Project Kangaroo joint venture which was blocked by the Competition Commission in 2009, it is not proposed that the JV Partners will contribute any video-on-demand content or other business to Canvas, and Canvas will have no role in aggregating, marketing or directly retailing any such television content.
Sheldon Mills, OFT Director of Mergers said: ‘In the context of a start-up joint venture such as Project Canvas, the merger control provisions are designed to capture arrangements leading to the transfer of a pre-existing business. Our investigation has confirmed that the JV partners, including the BBC, do not intend to transfer an existing business into the JV. Therefore, regardless of the potential significance of Project Canvas JV for the future of internet connected television, the notified proposals do not give rise to a merger qualifying for substantive investigation by the OFT.’
The Project now awaits final clearance from the BBC Trust before it can launch as planned at the end of the year.
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