Licence payers' investments, built up over many years, have produced a critical mass of talent and production capability for the BBC, together with an unparalleled archive of past programming. These assets have a secondary value, over and above their use on public service channels and outlets. The BBC, through BBC Worldwide, has a responsibility to ensure that this value is properly developed, and used, to the benefit of the licence payer.

In performing its commercial role, BBC Worldwide is fully subject to domestic and European Competition Law in the same way as any other British company. The Competition Act 1998 significantly strengthens the powers of the regulatory authorities to enforce fair trading.

In addition to these statutory provisions, and unlike its competitors, the BBC is subject to further requirements to trade fairly, arising from its Royal Charter and accompanying Agreement. These requirements, to which BBC Worldwide is also subject, are published as the BBC's Fair Trading Commitment.

This Fair Trading Commitment requires BBC Worldwide to:

 engage in commercial activities which are consistent with, and support, the BBC's role as a public service broadcaster;

 pay fair charges for any goods or services received from other parts of the BBC;

 charge prices which are a fair reflection of both costs incurred and market practice.

Compliance

BBC Worldwide's compliance with the Fair Trading Commitment is continuously monitored by the BBC's Board of Governors. A standing sub-committee of the Board of Governors, the Fair Trading Audit Committee, monitors and reviews the effectiveness of the controls across the BBC, which are designed to ensure Fair Trading. The Committee is chaired by the BBC's Vice Chairman, Baroness Young of Old Scone, and includes three other Governors.

Annual Statement on compliance with the Fair Trading Commitment

The Governors consider that the policies contained in the BBC's Fair Trading Commitment are consistent with the requirements of the Royal Charter and the accompanying Agreement. Through the Fair Trading Audit Committee, they have gained reasonable assurance that the framework of controls and procedures designed to ensure that these policies are applied throughout the BBC has been operating effectively throughout the year.

The BBC's external Fair Trading auditors, KPMG, have issued an opinion, the full basis and text of which are set out in the BBC's Annual Report and Accounts, that the Governors' statement appropriately reflects the BBC's compliance with its Fair Trading Commitment.