Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC accepts Paramount’s commitments on cross-border pay-TV services, (Jul 26, 2016)
Organizations Mentioned:Paramount Pictures | Sky UK | Sky plc
By Michael Menzhuber, J.D., LL.M.
The commitments offered by Paramount to address concerns regarding certain clauses in film licensing contracts for pay-TV services between Paramount and Sky UK have been rendered legally binding under European Union (EU) antitrust rules, the European Commission (EC) announced today.
In July 2015, the EC sent a Statement of Objections setting out its preliminary view that certain clauses in film licensing contracts for pay-TV between Paramount and Sky UK breached EU antitrust rules by:
requiring Sky UK to block access to Paramount’s films through its online pay-TV services (geo-blocking) or through its satellite pay-TV services to consumers outside its licensed territory (U.K. and Ireland); and
requiring Paramount to ensure that broadcasters outside the U.K. and Ireland were prevented from making their pay-TV services available in the U.K. and Ireland.
According to the EC, these clauses, which restrict the ability of broadcasters to accept unsolicited requests (passive sales) for their pay-TV services from consumers located outside their licensed territory, could result in the elimination of cross-border competition between pay-TV broadcasters and partition the EU’s Single Market along national borders.
EC is satisfied that the proposed commitments, offered by Paramount in April 2016, address these concerns and has made them legally binding on Paramount. The commitments provide that when licensing its film output for pay-TV to a broadcaster in the European Economic Area (EEA), Paramount will not:
reintroduce contractual obligations which prevent or limit a broadcaster from responding to unsolicited requests from consumers within the EEA but outside of the broadcaster’s licensed territory; and
reintroduce contractual obligations, which require it to prohibit or limit broadcasters located outside the licensed territory from responding to unsolicited requests from consumers within the licensed territory.
The commitments will apply throughout the EEA for a period of five years and cover both standard pay-TV services and, to the extent that they are included in film licensing contracts for pay-TV with a broadcaster, subscription video-on-demand services as well.
Companies: Paramount Pictures; Sky plc
News: Antitrust