Short Reads

Commission publishes commitments offered by Paramount Pictures in pay-TV investigation

Commission publishes commitments offered by Paramount Pictures in pay-TV investigation

Commission publishes commitments offered by Paramount Pictures in pay-TV investigation

02.05.2016 NL law

On 22 April 2016, the European Commission published commitments that were offered by Paramount Pictures to address competition concerns relating to provisions in its licence agreements with broadcasters that restrict the cross-border provision of pay-TV services.

In January 2014, the Commission opened proceedings to investigate contractual clauses in licence agreements between several major US film studios and the largest European pay-TV broadcasters. US film studios typically conclude bilateral agreements with a single pay-TV broadcaster for each country in the EU to licence audio-visual content, such as films, on an exclusive and territorial basis. In July 2015, the Commission announced that it had sent a statement of objections to broadcaster Sky UK and six US film studios alleging that clauses in licence agreements restricting the cross-border provision of pay-TV services, via satellite or online, may violate Article 101 of the TFEU.

In particular, the Commission had identified clauses in the licence agreements preventing Sky UK from responding to unsolicited requests from customers located outside its licenced territory of the UK and Ireland. In the Commission's view, broadcasters must not be prevented from making passive sales to viewers in other EU member states. In addition, some licence agreements contained clauses requiring the film studios to ensure that broadcasters other than Sky UK were prevented from making their pay-TV services available in Sky UK's licenced territory. According to the Commission, these clauses would grant "absolute territorial exclusivity" to Sky UK and eliminate cross-border competition between pay-TV broadcasters.

To address the Commission's competition concerns, Paramount Pictures has offered the following commitments:

  • Paramount Pictures will not (re)introduce contractual obligations, which prevent or limit a pay-TV broadcaster from responding to unsolicited requests from consumers located outside the broadcaster's licenced territory;
  • Paramount Pictures will not (re)introduce contractual obligations, which require Paramount Pictures to prohibit or limit pay-TV broadcasters located outside the licenced territory from responding to unsolicited requests from consumers within the licenced territory.

Paramount Pictures has also offered a commitment that it will not enforce such obligations in its existing pay-TV licence agreements.

The commitments would apply for a period of five years and cover both standard pay-TV services and subscription video-on-demand services. The Commission intends to declare the proposed commitments binding. Such a decision is not a conclusion that there has been an infringement of the EU competition rules, but it legally binds Paramount Pictures to respect the commitments it has offered.

Interested parties can submit their views on the proposed commitments until 23 May 2016. The Commission is continuing its investigation regarding the conduct of the five other US film studios and Sky UK.  

The pay-TV investigation shows the Commission's approach to the application of competition rules to new digital markets. The Court of Justice ruled in 2011 that broadcasters were not allowed to establish absolute territorial protections in licence agreements in the context of football matches broadcast via satellite. The Commission now seems to have applied the same principles used by the Court of Justice to geo-blocking online content, a topic that has been high on the Commission's agenda for some time. In May 2015, the Commission launched a sector inquiry into e-commerce, which included a focus on providers of digital content. The initial findings on the existence of geo-blocking practices were published in March 2016 [see our April 2016 newsletter]. In parallel with its investigations under competition law, as part of its Digital Market Strategy, the Commission published its action plan to modernise EU copyright rules and a proposal for a Regulation to enable the cross-border portability of digital content in December 2015. Further proposals in this respect are soon to be expected.

This article was published in the Competition Law Newsletter of May 2016. Other articles in this newsletter:

1. Commission reduced EURIBOR cartel fine imposed on Société Générale by EUR 218 million
2. ACM clarifies that a party cannot object to the fine imposed on another addressee of the decision

Team

Related news

05.09.2019 NL law
ECJ answers preliminary questions on jurisdiction in cartel damage case 

Short Reads - On 29 July 2019, the ECJ handed down a preliminary ruling concerning jurisdiction in follow-on damages proceedings in what is termed the trucks cartel. The court clarified that Article 7(2) Brussels I Regulation should be interpreted in such a way as to allow an indirect purchaser to sue an alleged infringer of Article 101 TFEU before the courts of the place where the market prices were distorted and where the indirect purchaser claims to have suffered damage. In practice, this often means that indirect purchasers will be able to sue for damages in their home jurisdictions.

Read more

08.08.2019 BE law
Regulating online platforms: piece of the puzzle

Articles - The new Regulation no. 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services, applicable as of 12 July 2020, is another piece of the puzzle regulating online platforms, this time focussing on the supply side of the platforms.

Read more

05.09.2019 NL law
Wanted: fast solutions for fast-growing platforms

Short Reads - Dominant digital companies be warned: calls for additional tools to deal with powerful platforms in online markets are increasing. Even though the need for speed is a given in these fast-moving markets, the question of which tool is best-suited for the job remains. Different countries are focusing on different areas; the Dutch ACM wants to pre-emptively strike down potential anti-competitive conduct with ex ante measures, while the UK CMA aims for greater regulation of digital markets and a quick fix through interim orders.

Read more

01.08.2019 NL law
General court dismisses all five appeals in the optical disk drives cartel

Short Reads - The General Court recently upheld a Commission decision finding that suppliers of optical disk drives colluded in bids for sales to Dell and HP by engaging in a network of parallel bilateral contacts over a multi-year period. The General Court rejected applicants' arguments regarding the Commission's fining methodology, including that the Commission ought to have provided reasons for not departing from the general methodology set out in its 2006 Guidelines.

Read more

05.09.2019 NL law
No fine means no reason to appeal? Think again!

Short Reads - Whistleblowers who have had their fine reduced to zero may still have an interest in challenging an antitrust decision. The Dutch Authority for Consumers and Markets (ACM) held two de facto managers personally liable for a cartel infringement but, instead of imposing a EUR 170,000 fine, granted one of them immunity from fines in return for blowing the whistle. The Trade and Industry Appeals Tribunal found that, despite this fortuitous outcome, the whistleblower still had an interest in appealing the ACM's decision.

Read more

01.08.2019 NL law
Brand owners beware: Commission tough on cross-border sales restrictions

Short Reads - The European Commission recently imposed a EUR 6.2 million fine on Hello Kitty owner Sanrio for preventing its licensees from selling licensed merchandising products across the entire EEA. Sanrio is the second licensor (after Nike) to be fined for imposing territorial sales restrictions on its non-exclusive licensees for licensed merchandise. A third investigation into allegedly similar practices by Universal Studios is ongoing. The case confirms the Commission's determination to tackle these practices, regardless of type or form.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring