A day before Ashley Highfield (pictured) becomes CEO, the Office of Fair Trading (OFT), has referred the BBC Worldwide/ITV/C4 Kangaroo VOD JV to the Competition Commission, for a more thorough scrutiny that will significantly impede its planned launch.

The OFT revealed the venture partners had made offers to remedy concerns and avoid the referral, “but they were of limited scope, which the OFT did not consider sufficient to resolve the concerns in a clear-cut fashion”.

So it passed the case on to the independent commission, whose own inquiry could take six months, saying: “Concerns arise because the concentration of these important and competing libraries of UK TV programming may give market power to the joint venture, enabling it to charge higher prices in syndicating content to wholesale customers, and potentially raise ... prices paid by VOD consumers, or limit the range of ways in which viewers can watch the parties’ content on demand.” Joost, Virgin Media (NSDQ: VMED) and BSkyB (NYSE: BSY) were amongst complainants to the OFT’s inquiry.

Whilst it cleared Lovefilm’s recent acquisition of Amazon’s UK DVD rental business in a case that similarly concerned market dominance issues, the OFT said there was insufficient evidence to make such a judgement about Kangaroo - though it acknowledged there are likely to be plenty of VOD alternatives available to consumers if Kangaroo ever raised prices. The OFT said it was making the referral “under the provisions of the Enterprise Act 2002”, which governs antitrust cases. Release.

ITV (LSE: ITV) exec chairman Michael Grade lashed out: “While I understand that the Office of Fair Trading is carrying out its statutory obligations, there is a serious problem with a regulatory framework that seems unable to take the most important interest into account - that of British viewers. This venture has been delayed by a reference to the Competition Commission, at the very same time that non-UK companies like Google (NSDQ: GOOG) and Apple (NSDQ: AAPL) are free to build market dominating positions online in the UK without so much as a regulatory murmur.”

Statement from the JV: “We’re naturally disappointed by the decision from the OFT and are frustrated that it will delay the launch of Kangaroo, however all parties remain committed to what the venture offers. The OFT’s decision shows that the assessment of the proposed joint venture involves some very complicated issues.  The parties are confident that when properly subject to more detailed scrutiny by the Competition Commission, the Competition Commission will conclude that the joint venture will provide wider choice for consumers and be seen as a pro-competitive force in the market place.”

Some commentators had long mooted August as a launch date for the service, which will offer programming outside the seven-day domestic public catch-up window with ads or for a fee. That always seemed unrealistic, given the CEO - well versed in political machinations - only starts tomorrow. Now it’s hopelessly optimistic. ITV conceded: “The reference process is likely to take several months and the service is therefore unlikely to launch on the previously anticipated timetable.”

• Joost, Time Out Take BBC Worldwide Concerns To OFT
• OFT Clears Lovefilm’s Amazon DVD Acquisition
• Kangaroo Faces OFT Questions; Minor Inquiry