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The complaints, from commercial sports and talk radio station talkSPORT and the British Educational Suppliers Association (BESA), separately alleged that the Executive's processes had breached a number of ³ÉÈË¿ìÊÖ policies and principles.

Rotha Johnston, chair of the Trust's Finance and Compliance Committee, said:

"The Trust takes its responsibility to ensure that the ³ÉÈË¿ìÊÖ adheres to its fair trading rules very seriously. In these two cases the ³ÉÈË¿ìÊÖ failed adequately to follow the right processes. We look to the ³ÉÈË¿ìÊÖ Executive to right these wrongs by putting in place robust measures to avoid this situation being repeated."

talkSPORT appeal

talkSPORT appealed to the Trust regarding the ³ÉÈË¿ìÊÖ's actions in acquiring the radio broadcast rights to the FA Cup from 2008/9 to 2011/12.

talkSPORT alleged that the Executive had breached the ³ÉÈË¿ìÊÖ's fair trading policy – specifically in relation to minimising negative competitive impacts on the wider industry and abiding by competition law – as well as obligations under the Royal Charter to ensure value for money for licence fee payers. talkSPORT also alleged the Trust had breached its obligation to exercise rigorous stewardship of public money.

The appeal was heard by the Trust's Finance and Compliance Committee in September 2009. Two parts of the appeal were specifically upheld.

• The Trust found that the ³ÉÈË¿ìÊÖ Executive failed to conduct a proper competitive impact assessment when bidding for the 2008/9 to 2011/12 FA Cup radio rights, amounting to a breach of the Executive's duty to endeavour to minimise the ³ÉÈË¿ìÊÖ's negative competitive impact on the wider market
• It found that in relation to this specific bid, the process in place for ensuring value for money had not been followed with sufficient rigour.

Furthermore, the Trust determined that the handling of this complaint could have been undertaken with more rigour by ³ÉÈË¿ìÊÖ Fair Trading. In particular, rather than focusing on the issue of whether the ³ÉÈË¿ìÊÖ paid more for the FA Cup rights than they were worth to a commercial operator, the complaint investigation should also have included more questioning on the processes and actions undertaken by the Executive to ensure value for money and to ensure compliance with the Fair Trading Guidelines.

In terms of the other parts of talkSPORT's complaint, the Trust found:

• There was insufficient evidence to support a determination that the ³ÉÈË¿ìÊÖ breached competition or state aid law
• There was insufficient evidence to support a determination that the successful bid made by the ³ÉÈË¿ìÊÖ was unreasonable in terms of value
• There was no evidence that the Trust did not sufficiently carry out its duties in relation to the stewardship of public money
• The ³ÉÈË¿ìÊÖ Executive has been open and transparent as far as competition law will allow.

The Trust agreed the following sanctions:

a) By January 2010, the Executive must report to the Trust on how it plans to strengthen the process of bidding for sports rights to ensure value for money for licence fee payers

b) By June 2010, the Executive's Fair Trading external auditors must report to the Trust on steps taken to assess, identify and minimise any potential negative competitive impacts of the ³ÉÈË¿ìÊÖ's activities in relation to the ³ÉÈË¿ìÊÖ's acquisition of sports rights; and

c) The Executive must note that achieving value for money does not necessarily mean securing exclusive sports rights, and if there are other ways of meeting the obligations of a particular service licence, these must be considered.

BESA appeal

BESA appealed to the Trust regarding three of the ³ÉÈË¿ìÊÖ's formal learning offerings on bbc.co.uk between 1997 and 2009. BESA alleged:

• That the ³ÉÈË¿ìÊÖ had developed certain formal learning services without appropriate approval or regulation
• That the ³ÉÈË¿ìÊÖ formal learning portal and its content were not distinctive enough
• That the services created a negative impact on the commercial market for educational content; and
• That the ³ÉÈË¿ìÊÖ's communication with BESA and its members was neither ‘meaningful [nor] trustworthy'.

The appeal was heard by the Trust's Finance and Compliance Committee in September 2009. Two parts of the appeal were specifically upheld:

• The Trust found that the Executive failed to conduct appropriate competitive impact principle assessments with regard to investment in Bitesize, Learning Zone Broadband and the Learning Portal since 2007, amounting to a breach of the competitive impact principle
• The Trust found that the ³ÉÈË¿ìÊÖ did not engage sufficiently with the wider industry concerning its new service developments.

Regarding the first finding above, the Trust considers it is necessary for the Trust to conduct an assessment of the potential competitive impacts of Bitesize, Learning Zone Broadband and the Learning Portal, covering developments to these offerings since June 2007, and the way in which they deliver against the ³ÉÈË¿ìÊÖ's Public Purposes. This will enable the Trust to determine whether the ³ÉÈË¿ìÊÖ Executive's failure to conduct its own competitive impact assessment since 2007 had any substantive effect.

In terms of the other parts of BESA's complaint:

• The Trust found there was no evidence to suggest that Bitesize and Learning Zone Broadband did not go through the correct approvals process at the time they were introduced
• The Trust found no evidence to suggest that, prior to 2007, the development of Bitesize and Learning Zone Broadband occurred without sufficient regulation; and
• The Trust declined to come to a separate finding regarding the allegation that the ³ÉÈË¿ìÊÖ's formal learning service is not distinctive. This part of the complaint is more appropriately determined through the review of BESA's allegations in the context of the implementation of the Competitive Impact Principle.

The Trust agreed the following sanctions:

a) No further increases in investment levels for Bitesize, Learning Zone Broadband and the Learning Portal will be considered until the Trust has completed its competitive impact assessment on developments since 2007; and

b) By January 2010, the Executive must report to the Trust on proposals for improving the level of engagement with the wider industry.

Ends

Notes to editors

More on the talkSPORT appeal

In mid 2008, following an auction by the Football Association, the Executive secured all packages of FA Cup radio broadcasting rights from 2008/9 to 2011/12. talkSPORT complained to the Executive about the ³ÉÈË¿ìÊÖ's actions in acquiring these broadcast rights. In January 2009, the ³ÉÈË¿ìÊÖ Executive's Fair Trading Committee dismissed all elements of talkSPORT's complaints. talkSPORT appealed to the Trust in May 2009 and, following a series of meetings with the Trust Unit, the complaint was heard by the Trust's Finance and Compliance Committee on 30 September 2009.

Fair Trading Appeal Investigation - talkSPORT, PDF (94KB)

More on the BESA appeal

BESA is a trade body representing over 300 organisations involved in the education publishing industry. BESA initiated discussions with the Trust in October 2008, raising a number of concerns relating to the ³ÉÈË¿ìÊÖ's activities in the formal learning online space, and a formal complaint was submitted in March 2009. The complaint was heard by the Trust's Finance and Compliance Committee on 30 September 2009. The three areas of activity specified in BESA's complaint were:

• ³ÉÈË¿ìÊÖ Bitesize (http://www.bbc.co.uk/schools/bitesize/)
• Learning Zone Broadband (http://www.bbc.co.uk/learningzone/clips/)
• Learning Portal (http://www.bbc.co.uk/learning/).

Complaints process - BESA

The ³ÉÈË¿ìÊÖ complaints procedure has three stages, with complaints first being seen by the Executive and only coming to the Trust on appeal. On an exceptional basis in this case, however, it was agreed by the Executive and BESA that the Trust would investigate the complaint in the first instance, as if it were an appeal.