Commission puts Paramount’s geoblocking commitments to test

The European Commission is consulting on commitments offered by film studio Paramount to resolve its investigation into ‘geoblocking’ and territorial restrictions.

In 2014 the Commission launched a formal investigation into agreements between six film studios and Sky which allegedly prevent access by EU consumers outside of the UK and Ireland to Sky’s services.  The Commission maintains that other provisions seem to require the studios to restrict non-UK broadcasters from granting access to UK consumers.

The Commission is concerned that the agreements confer on Sky absolute territorial exclusivity over the studios’ films in the pay tv market in violation of Article 101 TFEU.

Paramount has offered to commit not to limit passive sales to consumers outside the broadcaster’s licensed territory in any future agreements.  It also offers not to litigate against any broadcasters that agree to passive sales even where they would be prohibited under the terms of existing agreements.

Similar agreements between Sky and Disney, NBC Universal, Sony, Twentieth Century Fox and Warner Bros are also under investigation, although only Paramount has offered commitments at this stage.  Third parties have one month to submit comments on the commitments.

The Commission’s antitrust interest in the issue of geoblocking coincides with its policy initiative to promote the digital single market.  In May 2015, the Commission launched a competition sector inquiry into e-commerce which will probe particularly contractual barriers to cross-border trade. On 18 March 2016, the Commission published its initial findings of its sector inquiry in relation to geoblocking.

Case AT.40023: Cross-border access to pay TV; Commission press release IP/16/1530