The European Commission has accepted commitments by Hollywood studios not to apply clauses in contracts with Sky that prevent EU consumers outside the UK and Ireland from subscribing to Sky’s UK pay TV service to access films via satellite or online.
The EC has made commitments offered by Disney, NBCUniversal, Sony Pictures, Warner Bros. and Sky legally binding under EU antitrust rules.
The contract clauses prevented Sky UK from allowing EU consumers outside the UK and Ireland to subscribe to Sky UK’s pay TV services to access films via satellite or online. They also required NBCUniversal, Sony Pictures and Warner Bros. to ensure that broadcasters other than Sky UK are prevented from making their pay TV services available in the UK and Ireland.
The studios have now committed not to apply these clauses in existing film licensing contracts for pay TV with any broadcaster in the European Economic Area and will no longer put such clauses in any film licensing contracts for pay TV with broadcasters in the EEA.
Sky will also cease to apply existing clauses along these lines and will not sign up new ones in film licencing contracts with the Hollywood majors.
The case dates from 2015, when the EC set out objections to these clauses, which it said were in breach of EU antitrust rules and could eliminate cross-border competition between pay TV providers.
The Commission has now said it is satisfied that the commitments offered to address its concerns by the Hollywood studios and Sky at the end of last year are satisfactory.
The commitments made by the two sides will apply throughout the EEA for the next five years, covering both online and satellite pay TV services and, where applicable, SVOD services.
The EC accepted similar commitments made by Paramount in 2016. The Commission’s decision to accept these commitments was challenged in the EC’s General Court by French pay TV operator Canal+, which argued that territorial exclusivity was essential for the production of European cinema and necessary to protect intellectual property rights, but then pay TV operator’s case was rejected by the court at the end of last year.