Grade attacks OFT's Kangaroo decision

ITV executive chairman Michael Grade has criticised the decision by the Office of Fair Trading to refer Project Kangaroo to the Competition Commission.

Grade said rivals such as Google and Apple were using the regulatory system to "exploit" broadcasters by opposing the proposed ITV, BBC Worldwide and Channel 4 video on demand service.

"This venture has been delayed by a reference to the Competition Commission, at the very same time that non-UK companies like Google and Apple are free to build market-dominating positions online in the UK without so much as a regulatory murmur," he said.

"There must be a level playing field for those of us whose investment sustains UK production. Companies without that commitment, who financially contribute virtually nothing to the UK creative economy, are trying to use a narrow regulatory remit to exploit our investment at little cost or risk to themselves.

"If they succeed, the losers will be UK viewers, UK advertisers and UK producers. Today's ruling suggests that the regulatory framework does not seem to take that wider public interest sufficiently into account."

Kangaroo was expected to launch as early as next month but will now be examined by the Competition Commission for up to 24 weeks.

ITV shares closed at a new low of 44p, down almost 6%, following the announcement yesterday and a Deutsche Bank forecast that Kangaroo would result in about £4m of losses for the company this year. This morning the price fell to 44p.