European regulators opened an antitrust case Thursday against six major Hollywood movie studios and British pay-TV provider Sky UK, alleging they illegally blocked consumers in most of Europe from watching U.S. movies, TV shows and other related content.
The studios—Walt Disney Studios, NBCUniversal, Paramount Pictures, Sony Pictures Entertainment, 20th Century Fox and Warner Bros.—all face fines of up to 10 percent of its annual revenue for entering into improper licensing agreements with Sky UK, according to the Arizona Republic.
The Statement of Objections sent to the accused companies stated Sky UK made restrictions in the contracts it signed with the studios, which does not grant requests for it its pay-TV services from consumers in other parts of the European Union (EU). Without the contract restrictions, Sky UK could opt to sell its pay-TV services outside the United Kingdom and Ireland, according the European Commission (EC).
Regulators stated film studios generally license content to a single pay-TV provider in each EU country. However, the licensing makes it so Sky TV has "absolute territorial exclusivity," thus eliminating competition across country borders between pay-TV providers and partitioning "the internal market along national borders," according to the Los Angeles Times.
If these allegations prove true, then the studios and Sky UK would be in violation of European laws designed to prevent antitrust agreements.
"European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU," said Margrethe Vestager, the EU's commissioner in charge of competition policy, according to Yahoo! News. "Our investigation shows that they cannot do this today."
Sky UK said it received the statement and would "respond in due course."
The EC is now proposing changes to EU copyright rules to improve access to online content. Officials want "to ensure that users who buy online content such as films, music or articles at home can enjoy them while traveling across Europe," the commission said, according to the Los Angeles Times. Copyright licensing agreements can prevent that access.
