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From Antitrust Law Daily, January 13, 2014

Agreements between U.S. studios, European pay-TV broadcasters under EC antitrust scrutiny

By Jeffrey May, J.D.

The European Commission (EC) is taking a close look the competitive impact of licensing agreements between several major U.S. film studios and the largest European pay-TV broadcasters. Today, the EC announced that it had opened formal antitrust proceedings to determine whether provisions in the agreements prevent broadcasters from providing their services across borders in violation of EC competition law.

The EC noted that the agreements are between U.S. film studios, including Twentieth Century Fox, Warner Bros., Sony Pictures, NBCUniversal, Paramount Pictures, and broadcasters BSkyB of the United Kingdom, Canal Plus of France, Sky Italia of Italy, Sky Deutschland of Germany, and DTS of Spain. The companies, which were identified by the EC, had not officially commented on the investigation as of press time.

Generally, the studios license content to a single pay -TV broadcaster in a particular EC Member State (or a few Member States with a common language) on an exclusive and territorial basis. The EC is investigating whether licensing arrangements with “absolute territorial protection” may violate European Union (EU) antitrust rules.

The investigation follows an October 2011 EU Court of Justice decision, addressing the exclusive licensing system of the Football Association Premier League for the broadcasting of football matches. In that matter, the licensing restrictions granted broadcasters an exclusive live broadcasting right for Premier League matches on a territorial basis, generally corresponding to the territory of a Member State. These licensing provisions entailed that 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 eliminate all competition between broadcasters and partition the market in accordance with national borders. These provisions could not be justified by the need to ensure appropriate remuneration for the rightholders, given that this could be calculated by taking into account the actual and potential audience both in the Member State of broadcast and in any other Member State in which the broadcasts were received, the EC noted.

There is no legal deadline to complete the current inquiries, according to the EC announcement.

Companies: Twentieth Century Fox; Warner Bros.; Sony Pictures; NBCUniversal; Paramount Pictures; BSkyB; Canal Plus; Sky Italia; Sky Deutschland

MainStory: TopStory Antitrust

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