Kangaroo, the proposed video-on-demand service backed by BBC Worldwide, ITV and Channel 4, has been referred to the Competition Commission.

The referral was made by the Office of Fair Trading (OFT).

The OFT pointed out that Kangaroo's collective rights library would be the largest and richest source of UK TV content – not least because the BBC Worldwide and ITV are each planning to contribute the two single largest archives of popular British TV.

"Concerns arise," the OFT said, "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 video-on-demand consumers, or limit the range of ways in which viewers can watch the parties' content on demand."

The Competition Commission has 24 weeks in which to consider the issues.

"Video on demand is a new and fast-growing consumer sector, and we should judge the issues on evidence, rather than speculate about consumer behaviour," said Simon Pritchard, senior director of mergers at the OFT.