EC investigates restrictions in US studios' pay-TV deals in Europe

Pascale Paoli-Lebailly | 13-01-2014

The European Commission (EC) has opened formal antitrust proceedings to examine provisions in licensing agreements between several major US film studios and major European pay-TV broadcasters.

Involved on the US side are studios including Twentieth Century Fox, Warner Bros, Sony Pictures, NBCUniversal and Paramount Pictures, while the pay-TV broadcasters under scrutiny are BSkyB (UK), Canal+ (France), Sky Italia (Italy), Sky Deutschland (Germany) and DTS (Spain).

The EC will investigate in particular whether these provisions prevent broadcasters from providing their services across borders, for example by refusing potential subscribers from other Member States or blocking cross-border access to their services.

Audiovisual content, such as popular films, is licensed by the US film studios to pay-TV broadcasters on an exclusive and territorial basis, i.e. typically to a single pay-TV broadcaster in each Member State (or a few Member States with a common language).

Following a fact-finding investigation carried out in 2012, the EC will examine whether provisions of licensing arrangements for broadcasting by satellite or through online streaming between US film studios and the major European broadcasters, may constitute an infringement of EU antitrust rules.

In October 2011, the EU Court of Justice addressed in its Premier League/Murphy judgment the issue of licensing restrictions granting broadcasters an exclusive live broadcasting right for Premier League matches on a territorial basis.

TV viewers could only watch the matches transmitted by the broadcasters established in the Member State where they resided.

The court noted that licensing provisions preventing a satellite broadcaster from providing its broadcasts to consumers outside the licensed territory enable each broadcaster to be granted absolute territorial exclusivity in the area covered by the licence.

It thus eliminated all competition between broadcasters and partitioned the market in accordance with national borders.

This antitrust investigation launched on 13 January has no legal deadline.