Paramount Pictures and the European Union have finalized a deal as part of the EU’s anti-trust investigation into the six studios’ geoblocking of pay TV rights with Sky TV. The European Commission first launched its case in July last year against pay TV platform Sky and the six major Hollywood studios, arguing that customers across Europe should have access to Sky’s services in the UK and Ireland. At the time, E.U. competition commissioner Margrethe Vestager had argued that European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU.
“Our investigation shows that they cannot do this today, also because licensing agreements between the major film studios and Sky UK do not allow consumers in other EU countries to access Sky’s UK and Irish pay-TV services, via satellite or online,” said Vestager at the time. “We believe this may be a breach of EU competition rules.”
Paramount moved to offer the EU concessions, which have now been formally accepted. The concessions will come into effect for five years. As a result, Paramount will not block pay TV providers from “responding to unsolicited requests” from consumers in the EU, but outside of Sky’s licensed territory. The antitrust probe into Sky and the other studios continues.
“Viacom and Paramount have given binding commitments neither to enforce nor renew the types of clauses in premium pay TV license agreements that were investigated by the European Commission and that restrict European Economic Area (EEA) pay TV broadcasters from responding to unsolicited requests by consumers located in a different territory in the EEA,” a statement released today said. “No admission of liability has been made.”
“The commitments permit Paramount to continue to license films through premium pay TV output license agreements in Europe on an exclusive territorial basis. In addition, today’s agreement eliminates the possibility of fines and enables the Commission to close similar pending cases against Viacom and Paramount relating to [companies] in Italy, France, Germany and Spain.”
The European Commission said Paramount’s concessions, “address the Commission’s concerns regarding certain clauses in film licensing contracts for pay TV between Paramount and Sky UK. These clauses prevented Sky UK from allowing EU consumers outside the UK and Ireland to access films via satellite or online.”
These are, essentially, that Paramount will not introduce broadcaster obligations that prevent or limit a pay TV broadcaster from responding to unsolicited requests from consumers within the EEA but outside of the pay TV broadcaster’s licensed territory; Paramount will not prohibit or limit pay TV broadcasters located outside the licensed territory from responding to unsolicited requests from consumers within the licensed territory; and Paramount will not seek to bring an action before a court or tribunal for the violation of a broadcaster obligation or a Paramount obligation.
The ongoing debate over geoblocking content has been at the heart of this battle. Last summer, there was outcry over the E.U.’s attempts to break down the license barriers between individual European countries to create a single Eurozone for IP, including film rights. Those moves were denounced by many in the film business, who said it threatened to destroy the European independent film financing model overnight.