Guardian: Hollywood deals with BSkyB and other pay-TV companies to be investigated

Story from Guardian Media.

European competition regulators have launched an investigation into the exclusive deals pay-TV companies such as BSkyB have with the major Hollywood film studios.

The European Commission said that it intends to look into the "restrictions" in agreements between film studios and pay-TV companies that grant "absolute territorial exclusivity".

Joaquín Almunia, the EC vice president with responsibility for competition policy, said the investigation will focus on the biggest European broadcasters: BSkyB in the UK, Sky Italia in Italy, Vivendi's Canal+ in France, Sky Deutschland in Germany and DTS in Spain.

The film studios that will be scrutinised are listed as Rupert Murdoch's 21st Century Fox, Warner Bros, Sony Pictures, NBC Universal and Paramount. Murdoch's company owns Sky Italia, 39.1% of BSkyB and 54.5% of Sky Deutschland.

"The investigation will allow us to look at the restrictions in agreements between film studios and pay-TV broadcasters that grant 'absolute territorial exclusivity' to these broadcasters," said Almunia in a statement.

"I want to be clear on one point: we are not calling into question the possibility to grant licences on a territorial basis, or trying to oblige studios to sell rights on a pan-European basis." Almunia said that the focus will be on issues such as restrictions that may affect pay-TV subscribers who are blocked from accessing content when they travel, or move, to other EU states.

"To illustrate: if you subscribe to a pay-TV service in Germany and you go to Italy for holidays, you may not be able to view the films offered by that service from your laptop during your holidays," explained Almunia.

"Similarly, if I live in Belgium and want to subscribe to a Spanish pay-TV service, I may not be able to subscribe at all if there is absolute territorial exclusivity. Such provisions might constitute an infringement of EU antitrust rules."

He pointed out that the European Court of Justice has ruled in relation to broadcasting football matches that absolute territorial exclusivity may be anti-competitive if it eliminates all competition between broadcasters.

In 2012, BSkyB saw off a challenge to its monopoly over UK pay-TV fim rights – the company has exclusive deals with the "big six" Hollywood studios – after the Competition Commission ruled that video-on-demand rivals such as LoveFilm and Netflix provide a vibrant market for consumers.