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European Union

European Commission Sends Statement of Objections to Sky UK and Major US Film Studios Over Cross-Border Pay-TV Services Restriction

Strategic Insights

— 2 min read

The European Commission has sent a Statement of Objections to Sky UK and six major US film studios, alleging that they have bilaterally agreed to contractual restrictions that prevent Sky UK from allowing EU consumers located elsewhere to access pay-TV services available in the UK and Ireland. The Commission's preliminary view is that these restrictions may be in breach of EU competition rules, specifically Article 101 of the Treaty on the Functioning of the European Union. This investigation is part of the Commission's broader efforts to modernize EU copyright rules and promote wider access to online content across the EU.

Key Takeaways:

  • The European Commission has sent a Statement of Objections to Sky UK and six major US film studios (Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox, and Warner Bros.) over alleged contractual restrictions on cross-border access to pay-TV services.
  • The Commission's preliminary view is that these restrictions may be in breach of EU competition rules, specifically Article 101 of the Treaty on the Functioning of the European Union.
  • The investigation focuses on clauses in licensing agreements between the six film studios and Sky UK that require Sky UK to block access to films through its online pay-TV services or satellite pay-TV services to consumers outside its licensed territory (UK and Ireland).
  • The Commission's preliminary conclusion is that, in the absence of convincing justification, these clauses would constitute a serious violation of EU rules prohibiting anticompetitive agreements.
  • The Commission is also examining cross-border access to pay-TV services in other Member States, including France, Italy, Germany, and Spain, and will propose to modernize EU copyright rules as part of its Digital Single Market Strategy.
  • The aim is to reduce differences between national copyright regimes and allow for wider access to online content across the EU.
  • The Commission's actions are compliant with EU antitrust rules, which prohibit the restriction of passive sales in the internal market.
  • The investigation is ongoing, and the Commission will propose to reform EU copyright rules as part of its Digital Single Market Strategy.

Statistics:

  • Six major US film studios are involved in the investigation: Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox, and Warner Bros.
  • The Commission has identified clauses in licensing agreements between the six film studios and Sky UK that require Sky UK to block access to films through its online pay-TV services or satellite pay-TV services to consumers outside its licensed territory (UK and Ireland).
  • The investigation has been ongoing since January 2014.
  • The Commission will propose to modernize EU copyright rules as part of its Digital Single Market Strategy.
  • The aim is to reduce differences between national copyright regimes and allow for wider access to online content across the EU.

Sources:

  • M2 PressWIRE - July 23, 2015 - Antitrust: Commission sends Statement of Objections on cross-border provision of pay-TV services available in UK and Ireland.
  • European Commission - January 2014 - Investigation into cross-border access to pay-TV services.
  • European Commission - May 2015 - Digital Single Market Strategy.
  • EU Court of Justice - October 2011 - Ruling on the Premier League/Murphy cases (C-403/08 and C-429/08).
  • European Commission - 93/83/EEC - Satellite and Cable Directive.
  • European Commission - Case register - Case number 40023.

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