The European Commission is set to launch a formal competition inquiry into sales of pay-TV rights to screen premium sport and Hollywood movies, reports the FT. Such an inquiry would seek to establish whether “absolute territorial protection clauses” which dictate country-by-country licensing break competition law.
In January 2012, a communication to government ministers and the European Parliament on ‘A coherent framework for building trust in the Digital Single Market for e-commerce and online services’, the Commission has suggested there was a need to review the existing copyright law and the implications of the so-called ‘Premier League’ ruling.
Following the Premier League judgement, the commission conducted a fact-finding investigation to examine whether licensing agreements for premium pay-TV content contain absolute territorial protection clauses which may restrict competition, hinder the completion of the single market and prevent consumers from cross-border access to premium sports and film content.
The European Court of Justice (ECJ) ruled October 2011 that there must be a free market in the provision of programme services. The case came about because a UK pub landlady was fined £8,000 after being charged with using a Greek decoder to allow her customers to watch Sky football on Nova for about one-third of what Sky charges for public house subscriptions.
The ECJ – which followed the advice of its Advocate – deemed that national laws which prohibit the import, sale or use of foreign decoder cards are contrary to the freedom to provide services. It said national legislation, which banned the use of overseas decoders, could not “be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums”.
“It should be possible for the collective management of copyright to become more European structured, thereby facilitating the issues of licences covering a number of regions,” the Commission said, adding that “European citizens who have moved to another member state should be able to continue to watch their favourite programmes.”
The communication suggested that “Ambitious implementation of the European Strategy for Intellectual Property Rights will foster the development of a richer and more appropriate offer on a European scale.”
Selling rights on a pan-European rather than a country-by-country basis would reduce their value and could lead to rights-holders requiring their TV partners to include more copyrighted elements in broadcasts.