The European Commission has sent a Statement of Objections on cross-border provision of pay-TV services available in UK and Ireland.
The statement was sent to Sky UK and six major US film studios: Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox and Warner Bros.
The Commission takes the preliminary view that each of the six studios and Sky UK have bilaterally agreed to put in place contractual restrictions that prevent Sky UK from allowing EU consumers located elsewhere to access, via satellite or online, pay-TV services available in the UK and Ireland.
Without these restrictions, Sky UK would be free to decide on commercial grounds whether to sell its pay-TV services to such consumers requesting access to its services, taking into account the regulatory framework including, as regards online pay-TV services, the relevant national copyright laws.
If the Commission’s preliminary position were to be confirmed, each of the companies would have breached EU competition rules prohibiting anti-competitive agreements. The sending of a Statement of Objections does not prejudge the outcome of the investigation.
“European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU,” said EU Commissioner in charge of competition policy Margrethe Vestager.
“Our investigation shows that they cannot do this today, also because licensing agreements between the major film studios and Sky UK do not allow consumers in other EU countries to access Sky’s UK and Irish pay-TV services, via satellite or online. We believe that this may be in breach of EU competition rules. The studios and Sky UK now have the chance to respond to our concerns.”
US film studios typically license audio-visual content, such as films, to a single pay-TV broadcaster in each Member State (or combined for a few Member States with a common language).
The Commission’s investigation, which was opened in January 2014, identified clauses in licensing agreements between the six film studios and Sky UK which require Sky UK to block access to films through its online pay-TV services (so-called “geo-blocking”) or through its satellite pay-TV services to consumers outside its licensed territory (UK and Ireland).
The Commission previously also set out concerns as regards licensing agreements between the film studios and other major European broadcasters (Canal Plus of France, Sky Italia of Italy, Sky Deutschland of Germany and DTS of Spain).