July 23, 2015 / 12:16 PM / 2 years ago

EU charges Sky, U.S. studios with limiting pay-TV access

The main gate of entertainment giant Walt Disney Co. is pictured in Burbank, California May 5, 2009.Fred Prouser

BRUSSELS (Reuters) - The European Commission charged Sky UK (SKYB.L) and six major U.S. film studios on Thursday with illegally limiting access across the European Union to movies shown on pay-TV channels.

The Commission said in a statement its preliminary view was that each of the six studios and Sky UK had agreed contractual restrictions preventing EU consumers outside Britain and Ireland from accessing films shown by the broadcaster.

The six U.S. film studios are Disney (DIS.N), NBCUniversal, a subsidiary of Comcast Corp (CMCSA.O), Paramount Pictures, part of Viacom (VIAB.O), Sony (6758.T), Twentieth Century Fox (FOXA.O) and Warner Brothers TWC.N.

Certain clauses eliminate cross-border competition between pay-TV broadcasters and partition the market along national borders, the Commission said. In the absence of convincing justification, they would be serious violations of EU rules prohibiting anti-competitive agreements.

"European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU," said EU Competition Commissioner Margrethe Vestager.

"Our investigation shows that they cannot do this today."

The Commission is seeking to overhaul the continent's digital market to boost growth and catch up with the United States and Africa. Moves involve ending mobile roaming charges and reforming copyright rules to widen access to online audiovisual content.

The Commission has sent Sky UK and the studios a "statement of objections". They have the right to reply in writing or request a hearing before the Commission takes a final decision.

The charge follows an investigation launched in January 2014 into licensing agreements between major U.S. film studios and the largest European pay-TV broadcasters, such as Sky UK, Canal Plus, Sky Italia, Sky Deutschland and Spain's DTS.

Reporting By Philip Blenkinsop, editing by David Evans

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