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European Union Alleges Antitrust Actions by Major Studios, Sky

23 Jul, 2015 By: Erik Gruenwedel

The European Union July 23 filed antitrust charges against six major Hollywood studios and British satellite TV operator Sky UK, alleging the companies entered in unlawful pay-TV and digital agreements that hurt competition and hindered consumer access.

In a “statement of objections” sent to Walt Disney Studios, Universal Pictures, Paramount Pictures, Sony Pictures, 20th Century Fox, Warner Bros. and Sky, the EU claims the companies bilaterally agreed to put in place contractual restrictions that prevent Sky UK from allowing consumers throughout Europe to access, via satellite or over-the-top video, pay-TV services available in the U.K. and Ireland.

Without these so-called “geo-blocking” restrictions, Sky UK would be free to decide on commercial grounds whether to sell its pay-TV and on-demand services to consumers — taking into account regulatory and relevant national copyright laws.

The charges are part of the EU’s ongoing “Digital Single Market Strategy,” that aims to level the playing field in the rapidly evolving pay-TV and digital landscape.

"European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU. Our investigation shows that they cannot do this today. We believe that this may be in breach of EU competition rules,” Margrethe Vestager, EU commissioner in charge of competition policy, said in a statement.

The EU seeks to ensure that users who buy online content, including music and print content, can access it while travelling across Europe. The Commission alleges service providers, in particular those distributing movies and TV shows, could be prevented from providing cross-border portability features due copyright licensing arrangements.

“The studios and Sky UK now have the chance to respond to our concerns,” Vestager said.

The EU is also investigating similar studio agreements with European broadcasters such as France’s Canal Plus, Sky Italia, DTS in Spain and Sky Deutschland, among others.

A Sky representative acknowledged the "statement of objections" setting out the Commission’s preliminary views.

"We will consider this and respond in due course,” the rep said in an email.

Sky UK is owned by Rupert Murdoch’s 21st Century Fox, which also owns 20th Century Fox and 20th Century Fox Home Entertainment.


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