Michael Grade, the chairman of ITV, yesterday accused competition regulators of allowing Google and Apple to build dominant internet media businesses as his company's efforts to build a competitor were held up by the Office of Fair Trading.

ITV wants to rent and sell its library of programmes in conjuction with the BBC and Channel 4 through a joint-venture website. However, the OFT said that the alliance created concerns that required an in-depth review by the Competition Commission.

Mr Grade complained that the regulators were acting against viewers' interests. “This venture has been delayed by a reference to the Competition Commission, at the very same time that non-UK companies like Google and Apple are free to build market-dominating positions without so much as a regulatory murmur.”

What worried the OFT was that “the concentration of these important and competing libraries of UK TV programming” to the planned joint-venture could lead to the companies charging inflated prices to other companies' services, such as Apple's iTunes.

ITunes is the market leader in digital music, with a share estimated at more than 80 per cent. However, because the new service - dubbed Project Kangaroo - is not yet operating, the OFT said that it had insufficent evidence to proceed. The OFT rejected what it described as limited concessions from the broadcasters.

Watching television online is growing in popularity, although the medium is dominated by watching short clips on YouTube. Google's YouTube accounted for 48 per cent of all the online video clips watched in the UK in March, according to recent data from Comscore.

Interest in full programmes has increased dramatically this year as mainstream broadcasters have embraced the web. The BBC's iPlayer service, which features all BBC programmes transmitted in the previous seven days, attracts 700,000 views a day, but its share of online TV viewing was only 1.2 per cent in March.

The Competition Commission will take evidence and expects to conclude the review in mid-December.

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