Six U.S. Film Studios Charged With EU Anti-Trust Violation - Global Trade Magazine
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  July 27th, 2015 | Written by

Six U.S. Film Studios Charged With EU Anti-Trust Violation

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  • Geo-blocking: The practice of blocking access to content outside of a geographical area.
  • The European Commission found contractual clauses requiring Sky-UK to block access to films outside Britain and Ireland.
  • If the commission finds violations of antitrust rules, the studios may have to pay fines.

Six major U.S. film studios are being targeted by the European Union in an anti-trust case charging that they’ve conspired with UK-based satellite broadcaster Sky-UK’s to limit its reach across the 28-country bloc.

Named in the case are giants NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox, Disney, and Warner Bros, as well as Sky.

According to the EU Executive Commission (EC) in Brussels, a “statement of objections” has been sent to the six film makers regarding what it charges are “contractual restrictions” that prevent Sky-UK offering its full service to consumers beyond Britain and Ireland.

The Commission, which opened a probe into the seven companies and their territorial contracts in January 2014, reportedly found clauses requiring Sky-UK to block access to films through its online or satellite pay-TV services to consumers outside Britain and Ireland, a practice called ‘geo-blocking.’

In addition, the EC also said that it’s uncovered contracts requiring the studios to prevent their services being made available in the two countries to others than Sky-UK.

“European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU,” said EU Commissioner Margrethe Vestager. “Our investigation shows that they cannot do this today.”

The 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,” she said. “We believe that this may be in breach of EU competition rules.”

The companies involved have the right to respond. There is no legal deadline for the EC to complete antitrust inquiries and, if it decides that antitrust rules have been infringed, the companies can be forced to pay fines which, theoretically, could reach as high 10 percent of their overall annual turnover.