EU acts against Sky and US studios

The European Commission has accused Sky TV in the UK and six major Hollywood studios of breaking EU competition rules by blocking access to movie content in other EU countries.

The Commission’s anti-trust regulator has issued them with formal complaints.

The six studios are Disney, NBC Universal, Paramount Pictures, Sony, 20th Century Fox and Warner Bros.

The Hollywood studios and Sky TV have now been asked to respond formally to the claims.

The complaint follows an 18-month investigation by the European Commission into licensing agreements between the film studios and Sky, as well as other European broadcasters.

The Commission believes the deals have clauses that grant absolute territorial exclusivity to Sky and eliminate cross border competition between pay-TV companies elsewhere in the EU.

Companies respond:

• Sky: The European Commission is examining cross-border access to pay-TV services across a number of member states. As part of its ongoing enquiry, we have received a statement setting out the Commission’s preliminary views. We will consider this and respond in due course.
• Walt Disney Company: Our approach is one that supports local creative industries, local digital and broadcast partners and most importantly consumers in every country across the EU. The impact of the Commission’s analysis is destructive of consumer value and we will oppose the proposed action vigorously.

Other broadcasters under investigation include Canal Plus of France, Sky Italia, Sky Deutschland and DTS of Spain.

“European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU,” Competition Commissioner Margrethe Vestager said in a statement.

“Our investigation shows that they cannot do this today, also because licensing agreements between the major film studios and Sky UK do not allow consumers in other EU countries to access Sky’s UK and Irish pay-TV services, via satellite or online.

“We believe that this may be in breach of EU competition rules.”

The European Commission says it considers that the exclusivity clause violates competition rules and allows studios to gain more revenue by dividing up the market for their content on TV or on the internet.