The site, which provides free educational content for children in the 5-to-16 age group, will no longer be available after March 20, the BBC announced following discussions among the the U.K. government, the EC and the BBC Trust, the independent governing body that in January replaced the BBC's Board of Governors.
The BBC Trust is charged with enforcing the, which include promoting education for school-age children.
The EC has received a number of complaints alleging that the publicly funded BBC Jam, which has about 170,000 registered users and is operated by about 200 BBC employees, damages the interests of the commercial sector.
"Whilst we are not currently in a position to determine whether the BBC is noncompliant, as alleged by the industry to the EC, we cannot ignore the allegations facing the BBC right now," the BBC's acting chairman, Chitra Bharucha, said in a statement.
"To take no action wasn't an option," added a representative for the BBC Trust.
The BBC Trust has decided to suspend the service and asked management to prepare fresh proposals on how the corporation can promote formal education and draw on the successes of BBC Jam.
The proposals will undergo a BBC Trust Public Value Test--the BBC's mechanism for weighing the value of proposed programming and its possible market impact--as well as a market-impact assessment from a U.K. regulatory body, the Office of Communications.
Tim Ferguson of Silicon.com reported from London.