PARAMOUNT PICTURES CORPORATION NEW LOGOHollywood movie giant Paramount has agreed to drop contract clauses which prohibit European pay-TV firms from making their content available to UK customers.

Last summer the European Commission opened an investigation into Sky, Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox and Warner Bros, accusing the firms of breaking competition rules by preventing EU citizens from accessing pay-TV services regardless of their country of residence.

Broadcast rights to films and TV shows are usually sold to a single broadcaster in each EU nation and providers are routinely banned by contract clauses from accepting orders from overseas customers, helping to increase the value of content within each territory by granting domestic broadcasters exclusivity.

In a statement the European Commission said “such clauses restrict the ability of broadcasters to accept unsolicited requests (so-called “passive sales”) for their pay-TV services from consumers located outside their licensed territory.”

The Commission expressed concern that this “may eliminate cross-border competition between pay-TV broadcasters and partition the EU’s Single Market along national borders.”

Following the opening of the investigation, Paramount offered commitments not to enforce, or include in any new contract, “obligations, which prevent or limit a broadcaster from responding to unsolicited requests from consumers within the EEA but outside of the broadcaster’s licensed territory”.

The studio has also agreed to drop all contract provisions which “require it to prohibit or limit broadcasters located outside the licensed territory from responding to unsolicited requests from consumers within the licensed territory”.

Today’s undertakings will last for a period of five years and cover both broadcast and streaming services.

The EC says its probe into Sky and the remaining studios “continues”.