E.U. to Investigate Hollywood Studios’ European Pay-TV Deals

BRUSSELS: The European Commission has opened an antitrust investigation to look at the provisions in the licensing agreements between a number of U.S. studios and European pay-TV broadcasters.

The broadcasters involved in the probe are BSkyB in the U.K., Sky Italia in Italy, Canal+ in France, Sky Deutschland in Germany and DTS (operating under the Canal Plus brand) in Spain. The proceedings involve the U.S. film studios Twentieth Century Fox, Warner Bros., Sony, NBCUniversal and Paramount.

The investigation will allow the European watchdog 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 U.S. 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. Such provisions might constitute an infringement of E.U. antitrust rules, which prohibit anticompetitive agreements.

"I want to be clear on one point: we 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," said Joaquín Almunia, the VP of the European Commission responsible for competition policy. "Rather, our 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."