THE BBC is facing a review over concerns that its taxpayer-funded news empire is threatening commercial rivals.

A report today calls on Ofcom to consider setting new boundaries for the Beeb’s online operation amid fears its size is killing papers.

Dame Frances Cairncross’ report also urges the Competition and Markets Authority to probe Facebook and Google’s dominance of the £11.5billion UK online ad market to ensure it is “fair”.

Former journalist Dame Frances was hired by the Government to look into the ways of protecting, funding and sustaining quality journalism.

Sales of national and local papers have halved since 2007.

She concluded the Beeb should consider how to “complement rather than substitute” private news provision, and said Ofcom should probe claims the BBC was going beyond its “core purpose” by moving into “softer” news.

She also said online giants should reveal news sources on sites while Ofcom oversees their efforts to stamp out “fake” news.

The News Media Association welcomed the report and Culture Secretary Jeremy Wright vowed to consider its recommendations. The Society of Editors said the report showed the importance of good journalism to a “vibrant democracy”.

But the BBC denied it was crowding out other providers and warned: “Any curtailing of the BBC’s news offer would be counter-productive.”