April 22, 2016 / 8:47 AM / in a year

Paramount seeks to end Sky geoblocking case with concessions to EU

A Sky engineer installs a satellite dish on a house in Garforth, Britain March 17, 2016.Darren Staples

BRUSSELS (Reuters) - Viacom's (VIAB.O) Paramount Pictures has offered EU regulators concessions aimed at averting a possible fine over geographical restrictions within Europe on movie licensing deals between Sky UK (SKYB.L) and six U.S. studios.

The European Commission said the concessions proposed by Paramount would mean that the film maker would not stop pay-TV providers from responding to unsolicited requests from consumers who were in the European Union but outside the broadcaster's licensed territory.

The country-by-country licensing system for televising movies is a long-established and lucrative business model for the cinema industry.

Th deal that Paramount is offering would let Sky UK sell Paramount films to non-UK viewers, and allow non-UK broadcasters to sell their Paramount films to UK viewers.

The European Commission said on Friday that the proposal does not include Comcast's (CMCSA.O) NBCUniversal, Walt Disney (DIS.N), Sony (6758.T), Twentieth Century Fox (FOXA.O) and Warner Brothers TWC.N, whose deals with Sky will continue to be investigated.

"Today's agreement eliminates the possibility of fines and enables the Commission to close similar pending cases against Viacom and Paramount relating to broadcasters in Italy, France, Germany and Spain," Viacom and Paramount said in a statement.

Interested parties have a month to provide feedback before the EU competition authority decides whether to accept Paramount's offer which would be for a period of five years.

In January, Sky and the six studios -- NBCUniversal, Walt Disney, Sony, Twentieth Century Fox and Warner Brothers as well as Paramount -- disputed EU charges of anti-competitive behavior at a hearing.

Last year, the Commission accused them of preventing consumers outside Britain and Ireland from accessing films and other content broadcast by the British pay-TV group -- behavior known as "geoblocking", which the Commission is trying to eliminate as it promotes a Digital Single Market in the EU.

The EU wants to boost economic growth in the 28-country bloc by encouraging business competition. Defenders of territorial licensing, however, say it preserves the region's cultural diversity and safeguards fair payment for artists and content providers.

Reporting by Alastair Macdonald; Editing by Gabriela Baczynska; Editing by Ruth Pitchford

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