EC announces investigation into pay-TV movie deals

The European Commission is to investigate whether pay-TV rules breach EU competition law by preventing residents in one European Union member state from watching the pay-TV of another member state.

Joaquín Almunia, the Commission’s Vice President for Competition Policy, says the investigation will focus on deals between Hollywood studios and pay TV providers such as the UK’s BSkyB, Sky Deutschland and Canal Plus in Spain.

These deals give the broadcaster exclusive rights to films within their home country.

Mr Almunia says he wants to look at provisions in deals “that prevent the selling of the content in response to unsolicited requests from viewers located in other Member States – the so-called “passive sales” – or to existing subscribers who move or travel abroad.”

He told journalists: “To illustrate: 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 I live in Belgium and want to subscribe to a Spanish Pay TV service, I may not be able to subscribe at all if there is absolute territorial exclusivity.

“Such provisions might constitute an infringement of EU antitrust rules, which prohibit anticompetitive agreements.

“Indeed, the Court of Justice, in a judgment concerning the satellite broadcasting of football matches, has ruled that absolute territorial exclusivity given to a broadcaster may be anticompetitive if it eliminates all competition between broadcasters and leads to a partitioning of the Single Market along national borders.

“So in the context of the investigation we are launching today, 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. Of course, the opening of the investigation does not prejudge its outcome.”

Almunia stressed that the EC isn’t questioning “the possibility to grant licenses on a territorial basis, or trying to oblige studios to sell rights on a pan-European basis.”

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