Project Canvas cleared by OFT

Project Canvas has welcomed conclusions by the Office of Fair Trading (OFT) that its proposed joint venture does not qualify for investigation under the merger provisions of the Enterprise Act.Canvas, which brings together the BBC, ITV, Channel 4, Five, BT, Talk Talk and Arqiva, has plans to build an open internet-connected FTA television platform with common technical standards. The project was begun by the BBC, but amid criticism from friend and foe, other partners particularly from ISPs were brought on board.

In a statement, the OFT said it did not have jurisdiction to review Project Canvas under the merger provisions of the Enterprise Act 2002, in particular because none of the JV partners (including the BBC) is contributing a pre-existing business to the Canvas JV. This is a key difference with Project Kanagaroo, blocked by the Competition Commission in 2009, where existing VOD projects would have been incorporated into the new venture.

“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,” said Sheldon Mills, OFT director of mergers. “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.”

Welcoming the move, Project Canvas director Richard Halton said the decision set 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.”

Project Canvas had approached the OFT in March 2010, seeking formal clarification over the JV’s status.