EU accuses U.S. studios of antitrust violations
Says contracts block movies, media access
The European Union is going after Mickey Mouse. The EU’s antitrust arm Thursday accused six major U.S. film studios and a British television firm of improperly blocking viewer access to movies and other media content.
Intensifying a probe that began in January 2014, the European Commission filed formal charges known as a statement of objections against the Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox and Warner Brothers studios, along with broadcaster Sky UK. The commission alleged that viewers on Europe’s mainland were unfairly blocked from watching pay TV services available in the United Kingdom and Ireland.
“European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU,” said Margrethe Vestager, the EU’s commissioner for competition. “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.”
The case focuses on licensing clauses that require Sky UK to block access to films through its online pay-TV services — a procedure known as “geo-blocking ” — or through its satellite pay-TV services to all European consumers outside the U.K. and Ireland.
Conversely, the commission said some contracts required studios to ensure their licensing deals with European broadcasters other than Sky UK blocked those firms from making their pay-TV services available in the U.K. and Ireland.
The commission also is examining licensing agreements between the studios and France’s Canal Plus, Sky Italia, Sky Deutschland and Spain’s DTS.
The new antitrust charges mark an interim step in the investigation process that enables the companies to respond.
Under EU regulations, the companies could face fines as high as 10% of their most recent global annual sales if the allegations ultimately are upheld.
Confirming it had received the EU objections, Sky UK said it would “respond in due course.” NBC Universal said it is “communicating constructively with the European Commission.” Warner Brothers said it was cooperating, 20th Century Fox and Paramount declined to comment and Sony did not respond to a message.
U.S. movie studios have been selling exclusive territorial licensing rights to their films and other content “for longer than there’s been a EU,” said Neil Begley, a Moody’s senior financial analyst who covers the companies.
Enabling viewers in other European nations to gain access to Sky UK’s transmissions of movies “would undermine the studios’ rights to sell that content in those other countries,” Begley said.
Disney called the commission’s analysis “destructive of consumer value” and said it would “oppose the proposed action vigorously.”