Antitrust this! EU Commish goes after HOLLYWOOD’s big guns

After an 18-month investigation, the European Commission on Thursday decided to file antitrust charges against US movie studios 20th Century Fox, Warner Brothers, Sony Pictures, Paramount, NBCUniversal, and Sky TV.

Competition head honcho, Margrethe Vestager, has sent a so-called Statement of Objections to Sky and Co, usually the first step on the road to a fine of up to 10 per cent of global turnover.

Vestager could also impose new rules that would, in the Commission’s view, rectify the situation. The problem – as the Commish sees it – is geo-blocking.

Big film studios do deals with national broadcasters that limit, by country, where films can be broadcast. Vestager believes that such licensing agreements restrict access, limit cross-border competition, and are a form of anti-competitive price fixing.

“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, 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,” said Vestager.

And she’s not the only Commissioner with a bee in her bonnet about geo-blocking. In May, as part of a new Digital Single Market strategy, Digi-Veep Andrus Ansip launched a wider probe into issues.

As part of that inquiry, the Commish sent out questionnaires to content rights holders and broadcasters. An overhaul of copyright law, which could also tackle territorial licensing, could be on the cards before the end of the year.

But TV companies in Europe will fight hard against any changes to the law, many arguing that it protects minority language European films from Hollywood competition.

For its part, Disney said “the impact of the Commission’s analysis is destructive of consumer value and we will oppose the proposed action vigorously".

The movie studios and Sky now have three months to respond to the accusations. ®