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Monday, January 13, 2014
Europe Opens Investigation into Pay TV Services

The European Commission has opened an antitrust investigation concerning the cross-border provision of pay TV services.

The Comissions wants to take a closer look at the provisions in the licensing agreements between a number of US audiovisual studios and EU pay TV broadcasters.

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 are Twentieth Century Fox, Warner Bros., Sony, NBCUniversal and Paramount.

The investigation examine 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 Europe where each broadcaster operates via satellite and the internet. They prevent access by subscribers who are located outside the licensed territory.

"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 Joaquin ALMUNIA Vice President 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."

For instance, 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.

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

The European 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.

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