EU probes licensing pacts between U.S. film studios, pay-TV firms

Tue Jan 14, 2014 4:17am EST
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By Adrian Croft

BRUSSELS (Reuters) - The European Union opened an investigation into licensing agreements between major U.S. film studios and European pay-TV broadcasters on Monday, saying they may break EU anti-trust rules.

The probe by the European Commission, the EU's anti-trust watchdog, will focus on agreements requiring films licensed by U.S. studios to be shown exclusively in the EU member state where each broadcaster operates via satellite and the Internet.

The Commission, in principle, is against services being offered in one of the EU's 28 member states without people in other member states being able to access them.

It will focus on agreements between studios including Twenty-First Century Fox, Warner Bros, Sony Pictures, NBCUniversal and Paramount Pictures and European pay-TV broadcasters such as Britain's BSkyB, France's Canal Plus, Germany's Sky Deutschland, Sky Italia of Italy and DTS, which operates under the Canal Plus brand in Spain.

Films are licensed by U.S. studios to pay-TV broadcasters on an exclusive and territorial basis, typically to a single pay-TV broadcaster in each EU member state.

The Commission, which set no deadline for completing its investigation, said the probe would focus on the broadcasting of movies and not of sports events.

Companies found to have broken EU anti-trust rules can be fined up to 10 percent of their global revenues, which would be billions of dollars in the case of the studios and broadcasters.

Shares in BSkyB dipped 1 percent after the news and were trading 0.4 percent lower by 7:48 EST. Shares in Sky Deutschland were little changed.   Continued...

Security guards stand at the entrance of the Warner Bros beach during the annual MIPCOM television programme market in Cannes, southeastern France, October 4, 2010. REUTERS/Eric Gaillard