European Commission probes pay-TV model

November 25, 2013 09.10 Europe/London By Julian Clover and Robert Briel

HollywoodThe European Commission is close to launching a widespread antitrust probe into the sale of rights to exclusive TV content including films and sporting events.

A formal European Commission investigation could smash open the country-by-country licensing that has dominated the sales of exclusive pay-TV content such as live football and newly-released movies, writes the Financial Times.

The probe comes in the wake of the ruling in October 2011 by the European Court of Justice which said national laws that prohibit the import, sale of use of overseas smart cards are contrary to the freedom to provide services.

It followed a decision by the High Court in London to allow the appeal by pub landlady Karen Murphy to use of the Greek issued decoder must be allowed. At the time the judge warned there were other legal issues and those included the copyright of the Premier League’s logo and theme broadcast on the international feed.

The partial victory by Murphy led the Spanish commissioner with responsibility for competition policy, Joaquín Almunia, to begin a fact-finding mission that is now expected to lead to a full investigation.

The UK competition regulator has already conducted a widespread investigation into the UK pay-TV market.

In May 2012 a controversial reversal of provisional findings said the arrival of Netflix and enhancement of Lovefilm had changed its opinion to reflect new available evidence. Consequently;Sky Movies no longer gives BSkyB a material advantage over its rivals in the pay-TV retail market.

However, the European Commission looks et to look into whether “absolute territorial protection clauses” break competition law. These stop licensees from selling to other countries or accepting unsolicited demands from overseas customers to pay to access the content. Although illegal, many tens of thousands of people are believed to buy such premium TV subscriptions across the border; e.g. Dutch, German and British expats living in Spain, who like to continue to watch their national TV channels.