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EC opens investigation into pay-TV movie deals

The European Commission has accounted that it has opened an antitrust investigation concerning the cross-border provision of pay TV services, explaining that they intend to “take a closer look at the provisions in the licensing agreements between a number of US audiovisual studios and EU pay TV broadcasters.”

As far as broadcasters are concerned, the proceedings involve the largest pay-TV operators active in countries which represent the most important European pay-TV markets: BSkyB in the UK, Sky Italia in Italy, Canal+ in France, Sky Deutschland in Germany and DTS (operating under the Canal Plus brand) in Spain. The film studios involved, meanwhile, include Twentieth Century Fox, Warner Bros., Sony, NBCUniversal and Paramount.

More and more EU citizens, who watch films, use pay TV services broadcast by satellite and, increasingly, available through online streaming.

Popular films and other audio-visual content are licensed by US film studios to broadcasters in the EU. Such licensing occurs on a territorial basis. Typically, a license is granted for a film to a single broadcaster in each Member State.

The investigation will allow the European Commission to look at the restrictions in agreements between film studios and pay-TV broadcasters that grant “absolute territorial exclusivity” to these broadcasters. Such provisions ensure that the films licensed by the US studios are shown exclusively in the Member State where each broadcaster operates via satellite and the internet. They prevent access by subscribers who are located outside the licensed territory.

In a statement, the EC stressed that they “are not calling into question the possibility to grant licenses on a territorial basis, or trying to oblige studios to sell rights on a pan-European basis,” but that the investigation “will focus on restrictions 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.”

 

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