EU investigates BSkyB Hollywood deals

European competition regulators are investigating pay-TV companies, including BSkyB, over claims that their deals with Hollywood studios shut out competitors and keep prices for viewers artificially high.

The action, made public in Brussels yesterday, could have far-reaching implications for the way that US film-makers price and distribute their products in the $49.5bn (£31bn) European pay-TV market.

The European Commission said it is worried about the length of contracts between a number of major Hollywood studios and one pay-TV company.

A second, more recent, investigation concerns several pay-TV companies and focuses on an exclusivity clause in contracts, said Amelia Torres, spokeswoman for the European Competition Commissioner, Mario Monti.

"The Commission is concerned that such a clause might lessen competition between the Hollywood studios and, therefore, keep film prices artificially high in Europe," Ms Torres added.

She described both inquiries as being at a "completely preliminary stage", adding that, for the second investigation, the Commission visited a number of companies at the end of last year to collect documents.

A spokesman for Sky confirmed that the EU had requested information in relation to the investigation but would not be drawn further. "We have co-operated with the investigation," he said.

The inquiry began after the EU had its attention drawn to lengthy contracts between one European pay-TV company and several Hollywood studios. Any contractual arrangements that prevent rival companies entering the pay-TV market could be deemed to be unfairly inflating prices.

Although the Commission did not identify the companies concerned, Sky and and Germany's Premiere have been contacted by the Commission.