The accusation was made in the IAB's submission to the ongoing government review, led by former Trinity Mirror boss Philip Graf, into the BBC's online activities.
The IAB also rubbished claims by the BBC made in a KPMG-commissioned report this summer that it had only had a "minimal" impact on online ads and said lost revenues could reach £40.4m.
IAB chief executive Danny Meadows-Klue said: "The internet is made of several different market segments and is not just one market as the KPMG report presumes. As a result, the impact is much greater than the BBC claims."
The IAB is not alone in its opposition to the BBC's online activities. The British Internet Publishers Alliance, which represents the views of a number of major media owners, including the Telegraph Group and BSkyB, has accused the BBC of "breaking a catalogue of promises" and of "over-stepping the mark".
Ashley Highfield, BBC director of new media and technology, said that the BBC stands by the KPMG report.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.
This article was first published on Marketing