Antitrust probe set to cover sport and movies; Restrictions questioned after UK pub test case
Brussels is poised to launch a formal antitrust probe into sales of pay-TV rights to screen premium sport and Hollywood blockbusters, in a groundbreaking move that builds on a test case brought by a British pub landlady.
A formal European Commission investigation could smash open the country-by-country licensing that has dominated the sales of exclusive pay-TV content such as live football and newly-released movies, according to people familiar with the case.
The regulatory attack on restrictions that carve the EU market into national patches follows a European Court of Justice ruling in 2011 regarding Karen Murphy, a publican from Portsmouth, England, who had been fined for showing football to customers using a satellite card from Greece.
While Ms Murphy secured only a partial victory, the judges upheld the right of consumers to buy a TV decoder card in any EU country, a decision that is forcing sports bodies and movie studios to rethink and possibly overhaul how rights packages are sold.
Joaquín Almunia, the EU competition commissioner, last year sanctioned a “fact finding” effort in light of the ruling to see whether barriers to cross-border access merited antitrust scrutiny and possible enforcement action.
Some investigators are now poised to step up their inquiries into whether “absolute territorial protection clauses” break competition law. These stop licensees from selling to other countries or accepting unsolicited demands from overseas customers to pay for access to the content.[eap_ad_1]
Full details of the probe remain unclear. But it will potentially have ramifications for football competitions such as the English Premier League, and Hollywood studios such as Sony Pictures Entertainment and 21st Century Fox.
A commission spokesperson declined to comment. Such investigations typically stretch for several years before charges are brought against groups. If it identifies illegal practices, the commission can levy fines of up to 10 per cent of a group’s turnover.
Big football competitions and Hollywood studios have long maintained a lucrative relationship with the pay-TV industry, which bought exclusive content to attract subscribers.
While the investigation could potentially bring down EU barriers, it touches on highly sensitive political debates over the rights to audiovisual content and could have serious implications for the industry. “This is a major look at the TV market in Europe,” a person familiar with the subject said.
Maurits Dolmans, a partner at Cleary Gottlieb, said the 2011 Premier League case concerned satellite sports broadcasting and the court left open whether it could be applied to other distribution channels and other forms of content.
“The commission will have to take into account different economic factors,” he said. “Forcing EU-wide licensing may be attractive for consumers in richer countries, who may pay less, but not necessarily for consumers in poorer countries, who might be forced to pay more.”