Major Hollywood entertainment providers are are facing tough questions this week after European regulators announced antitrust charges against the big studios as well as the U.K.-based pay TV service Sky TV for a practice known as “geo-blocking.” An agreement by Sky TV with the Hollywood studios prevented viewers located outside of the U.K. and Ireland from accessing the studios’ movies and TV shows. Sky TV in effect had established territorial exclusivity in Ireland and the U.K., which then allowed them more freedom in pricing their services without fear of competition. Eliminating the barriers to media access across national borders is one of the EU Competition Commission’s (EUCC) top priorities.
Illustrating this point, there are similar investigations ongoing in Europe involving France’s Canal Plus, Italy’s Sky Italia, Germany’s Sky Deutschland, and DTS in Spain.
EU Competition Commissioner Margrethe Vestager stated, “European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU. Our EU economy Internet antitrust investigation shows that they cannot do this today…We believe that this may be in breach of EU competition rules.”
The other half of the Sky TV agreement required that the six Hollywood studios: Disney, NBCUniversal, Paramount Pictures, Warner Bros., Sony, and Twentieth Century Fox, prevent broadcasters other than Sky TV from offering their services in Ireland and the U.K.
Opening access to consumers of online content such that they can access that content throughout Europe is the end goal, but current copyright and licensing law is still handled by national governments. By pursuing these antitrust cases in court, the EUCC hopes to slowly move towards what is known as the Digital Single Market.
This goal would by nature lead to the removal of regulation authority of copyright law by national governments in Europe, and instead give that authority to the European Union. The incentive for this would be that easing the ability for customers to access the services of digital businesses throughout Europe, would in turn stimulate the stagnant economies of the EU. Should the EUCC win its case, it can fine the companies involved up to 10% of their global annual revenue.