The Office of Fair Trading has called for more power to be given to Ofcom to enforce anti-competition rules on the BBC.
The Office of Fair Trading has called for more power to be given to Ofcom to enforce anti-competition rules on the BBC.

The OFT wants to see Ofcom given greater scrutiny over how the BBC promotes its existing services and even take a role in drawing up the licences for any new services.

In its reply to the Department for Culture, Media and Sport's green paper on the BBC's future, the OFT said there were "serious problems" with the framework governing the corporation's competitiveness.

It said the BBC had an important role in creating valuable public programmes, but warned: "It can also produce outcomes that are uniquely damaging to effective competition and to commercially funded innovation on media markets, due to the BBC's unique scale, scope, status and ambition".

The green paper sees a role for Ofcom in advising on the potential market impact of licences that control the BBC's services. But the OFT goes further, calling for itself and Ofcom to be given a role in drawing up the licences, and helping to police them.

Like all corporations, the BBC is subject to competition law, but the OFT wants to see an extra set of rules drawn up, enforceable by Ofcom, which would go further than competition laws and help police the BBC's "unique status".

Ofcom would be able to limit "undue cross-promotion" of BBC services, have access to detailed plans for any new public or commercial services and control sponsorship of events to prevent the BBC shutting out other broadcasters.

The green paper admits the corporation's current fair trading commitment is controversial and that some competitors do not know where to turn to enforce a complaint against the BBC.

News of the OFT's submission - sent to the DCMS on 2 June - comes in the wake of last week's annual report for BBC Worldwide, which showed the commercial arm's profits had increased by 50% to£55m this year, helped by sales for shows such as Strictly Come Dancing.

The corporation argues that this money is ploughed back into the BBC to support licence fee funding. But the OFT says that this "cannot be a sufficient justification" and fears BBC Worldwide is distorting markets.

The BBC says it is using the green paper's contents as its guide on competition. It says it has already addressed competition issues, pointing to the sale of Evemagazine and moves to stop cross-promoting other magazines on air.