Project Canvas clears OFT hurdle

Project Canvas has welcomed the Office of Fair Trading’s long-awaited decision that the joint-venture VOD service does not fall within its jurisdiction under the merger provisions of the Enterprise Act 2002.

The OFT, the UK competition regulator, was set to examine Project Canvas, the proposed UK over-the-top video-on-demand service backed by Arqiva, the BBC, BT, Channel 4, Five, ITV and TalkTalk. The companies involved in the project submitted analyses to the OFT setting out why they believe the joint venture doesn’t constitute a qualifying merger under the terms of the Enterprise Act. Earlier this year, Richard Halton, director of Project Canvas, said: “We will be making it clear that the coming together of these companies would not constitute a merger.”

The OFT yesterday ruled that is does not have jurisdiction to review Project Canvas because none of the partners is contributing a pre-existing business to the joint-venture. It said that unlike the Project Kangaroo joint-venture that was stopped by the Competition Commission in 2009, non of the companies involved with Project Canvas are planning to contribute any VOD content or other business and that they will not have a roll in aggregating, marketing or directly retailing TV 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 decision was met with approval from Canvas. Director Richard Halton said: “The Project Canvas partners welcome the decision from the OFT, which confirms our analysis and sets the scene for the final stage of the regulatory process. Project Canvas aims to create an open platform that delivers a connected future for free-to-air TV and a competitive market for internet connected TV services in the UK. The Project Canvas partners are committed to achieving that aim.”