Hollywood’s five major studios’ licensing agreements with leading European pay TV operators such as the UK’s BSkyB and France’s Canal+ are to be investigated by the European Commission (EC).
EC Commissioner for Competition Policy Joaquín Almunia said the investigation would investigate the “restrictions” in agreements between film studios and pay-TV broadcasters that grant “absolute territorial exclusivity”.
It will focus on the biggest European broadcasters: BSkyB in the UK, Sky Italia in Italy, Vivendi’s Canal+ in France, Sky Deutschland in Germany and DTS in Spain.
Film studios that will be probed include 21st Century Fox, Warner Bros, Sony Pictures, NBC Universal and Paramount.
Speaking about the current “restrictions”, Almunia said: “Such provisions ensure that the films licensed by the US studios are shown exclusively in the Member State where each broadcaster operates via satellite and the internet. They prevent access by subscribers who are located outside the licensed territory.”
“If you subscribe to a pay-TV service in Germany and you go to Italy for holidays, you may not be able to view the films offered by that service from your laptop during your holidays.
“Similarly, if you live in Belgium and want to subscribe to a Spanish pay-TV service, you may not be able to subscribe at all if there is absolute territorial exclusivity.“
At the same time, he pointed out that the Commission was “not calling into question the possibility to grant licenses on a territorial basis, or trying to oblige studios to sell rights on a pan-European basis”.
Almunia suggested that the granting of “absolute territorial exclusivity” might constitute an infringement of EU anti-trust rules which prohibit anti-competitive agreements; and referred to a 2011 judgement by the European Court of Justice in favour of the English pub landlady Karen Murphy against the English Premiere League.
“We will carefully examine if the principles set out by the Court of Justice should also be applied to other types of audiovisual content such as the popular films licensed by the US studios,” Almunia said. “Of course, the opening of the investigation does not prejudge its outcome.”
In a first response to news of the opening of formal anti-trust proceedings, a Warner Bros. spokesperson said: “We intend to co-operate fully with the European Commission’s investigation. It is premature to comment further at this time”