Why Hollywood studios are facing antitrust scrutiny in Europe
The Sony Pictures Entertainment studio lot entrance in Culver City.
Six major Hollywood studios and British pay-television service Sky TV have run afoul of European regulators, who accuse the companies of illegally blocking access to U.S. movies, TV shows and other content for most consumers outside the U.K. and Ireland.
What happened?
The European Commission on Thursday filed an official “statement of objections” against Sky UK and the major U.S. film studios: Disney, NBCUniversal, Paramount Pictures, Sony Pictures, 20th Century Fox and Warner Bros.
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The studios face potentially big fines for allegedly entering into improper licensing agreements with Sky UK that prohibit viewers outside Britain and Ireland from accessing its programming via satellite or the Internet.
So what’s the big picture?
This action comes amid broader efforts by European regulators to prevent so-called geo-blocking, which opponents say limits consumer access and eliminates cross-border competition between pay-TV companies. The commission has previously gone after companies like Google.
How long has this been going on?
This is part of an ongoing investigation that began in January 2014. It stems from a 2011 ruling that addressed territorial restrictions in licensing agreements with satellite broadcasters.
What’s next?
Now that the European Commission has made its objections known, the studios and Sky can examine the investigation documents, reply in writing and request a hearing to present their case. Only then can the commission take a final decision. There is no legal deadline for the European Commission to complete its inquiry.
Does it affect U.S. consumers?
No, only European consumers will see any impact from this particular investigation.
Have the studios responded?
Disney has come out strongly against the commission’s action, saying it is “destructive of consumer value and we will oppose the proposed action vigorously.” Warner Bros. and NBCUniversal were more reserved in their statements, noting that they are cooperating with the investigation.
Sky UK has said it received the EU statement and would “respond in due course.”
Sony, 20th Century Fox and Paramount declined to comment.
Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder.
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