The BBC in the UK this week said simply that it planned to allow a number of national newspapers to use some of its video assets in their news, but already there is talk of the BBC distorting rivals in the new market.
News Corp’s local subsidiary News International, owner of titles including the Sun and the Times, immediately rejected the deal citing “onerous marketing conditions” which would promote the BBC.
The company said that although the BBC says the content is free, by saying that news organization could not place advertising alongside it, and insisting on links back to the BBC web site, it was extracting a significant payment in terms of free marketing.
The BBC said it would go ahead and share news video content with four other UK national newspaper groups which own the Daily Mail, the Guardian , the Telegraph and the Independent ‘ the key general purpose dailies in the UK apart from those owned by News International.
Ingrid Silver, new media partner at Denton Wilde Sapte, a UK lawyer firm which specialises in this area suggested that because the BBC is coming fresh into a market where competition already exists, it could be accused of using state aid to distort competition, something which might get it into trouble with the European Union.
Silver suggested that the BBC’s commercial rivals would immediately be considering whether to complain to the competition authorities and we reckon she’s right. A company that gets $5 billion of state aid each year, though the TV license, has to be careful which commercial partners it chooses to work with.