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 EU 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

11.01.2022 EU law
2022: the big reveal of 2021’s competition law promises

Short Reads - 2021 was riddled with sneak previews of a “review of competition policy tools with unprecedented scope and ambition”. These sneak previews, alongside 2021’s other competition law developments, seem to point in the direction of a more ‘social’ side to competition law in 2022, as well as looming Big Tech and Big Pharma battles, intensified (international) cooperation, more clarity on merger-related obligations for companies, and shiny new vertical and horizontal block exemption regulations. 2022 will reveal how and when the revised tools will materialise.

Read more

02.12.2021 EU law
ECJ: private enforcement in aviation sector also a national court's game

Short Reads - Recently, the ECJ ruled that national courts dealing with private enforcement cases are competent to apply EU competition law to historical behaviour in the aviation sector, regardless of public enforcement by the Commission and national competition authorities, and regardless of whether or not such authorities had authority to pursue public enforcement in the relevant period.

Read more

02.12.2021 NL law
Google Shopping: self-preferencing is a form of abuse of dominance

Short Reads - On 10 November 2021, the General Court (GC) almost entirely dismissed Google’s action against the European Commission’s Google Shopping decision. According to the European Commission (the Commission), Google illegally favoured its own comparison shopping service by displaying it more prominently in its search results than other comparison shopping services (see our July 2017 Newsletter). The Commission found that Google was abusing its dominant position and imposed a EUR 2.42 billion.

Read more

02.12.2021 NL law
Gun jumping: beware, the Commission will take action

Short Reads - The Commission has imposed interim measures on Illumina and GRAIL. These measures include the obligation to run GRAIL by independent management. By adopting interim measures in addition to opening an investigation into whether Illumina and Grail breached the standstill obligation, the Commission has made clear it will not shy away from tough action against gun jumping during an ongoing merger review. 

Read more

02.12.2021 NL law
Back to the future – Commission publishes roadmap for green and digital challenges

Short Reads - The Commission’s Communication “A competition policy fit for new challenges” (link) (the “Communication”) identifies key areas in which competition law and policy can support European efforts in dealing with the challenges of the green and digital transitions. The document covers all areas of competition law (antitrust, merger control, and State aid) and identifies various ways in which new and existing tools can contribute to addressing these challenges.

Read more

02.12.2021 NL law
Dominant firm may refuse to supply retailer after initial delivery

Articles - The Brussels Court of Appeal has held that a dominant producer firm may have valid reasons to refuse further supplies to a retailer, despite its dominance and despite previous deliveries. The Court of Appeal stressed the freedom for any company, including dominant firms, to choose their trading partners, in particular when there are valid and objective non-discriminatory reasons to refuse further direct supplies and when the retailer has alternative sources of supply.

Read more