Hollywood and Sky in showdown with Brussels over TV licensing deals

The EC’s competition authorities have highlighted Sky TV’s deals with Disney, Universal, Paramount, Sony, 20th Century Fox and Warner Bros, saying they could violate EU law because they prevent customers outside the UK or Ireland from accessing the services

Pay-TV deals, such as Sky’s with the Premier League, could be affected by a change to the rules (AFP/Getty)

Executives from Hollywood studios and Sky TV have arrived in Brussels for a hearing on pay TV that could affect the entire system of film and broadcasting licences across Europe.

The three-day, closed-door hearing, hosted by the European Commission, is looking at whether licensing deals in different countries violate the rules for an open, single market across the European Union’s 28 member states.

The studios defended their deals, insisting that they help promote diversity, innovation and competition.

The European Commission’s competition authorities have highlighted Sky TV’s deals with Disney, Universal, Paramount, Sony, 20th Century Fox and Warner Bros, saying they could violate EU law because they prevent customers outside the UK or Ireland from accessing the services.

The broader concerns touch on streaming services, such as Netflix and Amazon Prime, which vary from country to country within the EU.

Other pay-TV arrangements could also be affected, including the Premier League’s current deal with Sky.

Margrethe Vestager, the EU Competition Commissioner, last year warned the studios about the Sky licensing deals. “European consumers want to watch the pay-TV channels of their choice, regardless of where they live or travel in the EU,” Ms Vestager said when she announced the charges in July.

Ms Vestager argues that the studio deals with Sky violate EU law, because they prevent potential European customers outside the UK and Ireland from subscribing to services through geoblocking – the practice of restricting access in certain markets.

Officials say this contradicts the core single market principle that consumers should be able to access the goods and services available elsewhere in the EU.

The hearings fit into the wider efforts to overhaul century-old copyright practices and create a digital single market across the EU, which the commission says would boost cross-border consumption by nearly £14bn.

The commission has already proposed portability rules, allowing customers to use services such as Netflix outside their home country.

Studios have retorted that these moves would effectively destroy copyright protection and wipe out the independent film industry across Europe.