The probe by the European Commission, the EU's anti-trust
watchdog, will focus on agreements requiring films licensed by
U.S. studios to be shown exclusively in the EU member state
where each broadcaster operates via satellite and the Internet.
The Commission, in principle, is against services being offered
in one of the EU's 28 member states without people in other
member states being able to access them.
It will focus on agreements between studios including
Twenty-First Century Fox, Warner Bros, Sony Pictures,
NBCUniversal and Paramount Pictures and European pay-TV
broadcasters such as Britain's BSkyB, France's Canal Plus,
Germany's Sky Deutschland, Sky Italia of Italy and DTS, which
operates under the Canal Plus brand in Spain.
Films are licensed by U.S. studios to pay-TV broadcasters on an
exclusive and territorial basis, typically to a single pay-TV
broadcaster in each EU member state.
The Commission, which set no deadline for completing its
investigation, said the probe would focus on the broadcasting of
movies and not of sports events.
Companies found to have broken EU anti-trust rules can be fined
up to 10 percent of their global revenues, which would be
billions of dollars in the case of the studios and broadcasters.
Shares in BSkyB dipped 1 percent after the news and were trading
0.4 percent lower by 7:48 EST. Shares in Sky Deutschland were
EU Competition Commissioner Joaquin Almunia said the Commission
was "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".
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He said the investigation, however, would focus on
restrictions that prevented pay-TV firms from selling content to
viewers in EU member states outside their home market, or to
subscribers who traveled abroad.
"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," Almunia told a news
conference. "If I live in Belgium and want to subscribe to a Spanish
pay-TV service, I may not be able to subscribe at all," he said.
Almunia cited a 2011 decision in which the European Court of Justice
ruled against the English Premier League and BSkyB after pub
landlady Karen Murphy was convicted for showing football matches
live via a Greek network.
Europe's highest court ruled in that case that
absolute territorial exclusivity given to a broadcaster may be
anti-competitive if it eliminates all competition between
broadcasters and leads to a partitioning of the EU's single market
along national borders, Almunia said.
The Commission would now look at whether the principles set out by
the Court of Justice in the soccer case should also be applied to
films licensed by the U.S. studios, he said.
Asked why the Commission was not including soccer matches in its
probe, Almunia said exclusive territorial restrictions for the
screening of football matches were being eliminated following the
2011 Court of Justice decision.
(Additional reporting by Kate Holton in
London; editing by Susan Fenton)
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