Friday, 23 September 2011

Rough type up of submission to the OFT

Dear Sir/Madam

Firstly can I ask that you treat this this report as a Anti Competition report and not a Broadcasting report as this does not fall within the remit of OFCOM.

Below I list a number of points that I think break both
Chapter I prohibition prohibits agreements between businesses that prevent restrict or distort competition to an appreciable extent in the UK.
Chapter II prohibition prohibits the abuse of a dominant position. Holding a dominant position is not unlawful but it is unlawful to abuse that position. The prohibition therefore relates to the conduct of the company not its position in a market.
of the Competition Act 1998

As you may be aware on 29/07/2011 the British Broadcasting Corporation (BBC) announced a 7 year deal to share control of the Broadcasting rights for Formula One within the UK with British Sky Broadcasting (BskyB), This new contract I believe breaks the above Chapters for the following reason.

Chapter I
I believe the BBC have Restricted/Distorted competition as they have entered into the deal during a period of dominance.

The BBC had exclusive rights under contract with the Formula One Management (FOM) to F1 until the end of the 2012 season and whilst this contract was in place the FOM could not consider any bids from any other companies who had shown interest in bidding for the rights.
On the 29/07/2011 the BBC entered into a deal with BskyB and extended the period for a further 5 years effectivley preventing other interested parties from making a legitimate bid once the existing contract came to an end.
Bernie Ecclestone (head of the FOM) was qouted as saying
'Ecclestone added with the BBC's original contract not due to expire until the end of 2013, it effectively scuppered any moves to go with Channel 4 or even return to ITV.
also when
Asked ' if the BBC 'held all the cards' over the new deal, Ecclestone added: “Yes, absolutely. If they [Channel 4] had said they wanted to sign a contract today to start Broadcasting for £45m a year, then we would have probably done it.

“But that's the problem. We couldn't deal with them, even if they had wanted to.”
“I spoke with ITV and came up with the same problem as Channel 4 had. We had a contract with the BBC which didn't run out until 2014.
“We couldn't very well do a deal with other people for them to start doing something next year, because we had that contract.

as you can see from the above quotes ITV, Channel 4 and Channel 5 were interested in bidding for the contract but were unable too until the existing BBC contract had ended
The BBC had also stated that they themselves may have had end the original contract at the end of this season (2011, one year early) due to finances.
So in effect the BBC have extended a contract by 5 years whilst they were in a dominant position although they were in no position to make a new bid once the contract ended thus preventive other interested parties from making a legitimate bid.

Chapter II
I feel that the BBC while in a dominant position (being in control of the contract and rights) abused this dominance be inviting BskyB to a extended deal preventing other interested parties from making a legitimate bid once the contract in place and ended.

I need to reword this and set it out better anyone help?

Heres a link to the OFT's Overview of what the points above are referring too

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