Paramount Concedes to the European Commission

Paramount Pictures

Paramount Pictures Concedes to the European Commission in PayTV and SVOD Antitrust Investigation

Paramount Pictures has made several commitments to the European Commission in their antitrust case against the major US studios, Sky UK, and several other European broadcasters that will change the way content is licensed in Europe.

There are two fundamental areas of contention. First, concerns PayTV contractual clauses that prevent cross-border access to content in the 28 European Economic Area (EEA) countries. Second, are clauses that protect the exclusive licensing of content by one provider in a particular territory.

Paramount was the first studio to formally respond to the Commission’s concerns. It’s no surprise that of all the major US studios, they have the least to lose if the proposed changes go into effect.

Studios such as Sony, Warner, and Disney have massive catalogues of content that will be negatively affected by Paramount’s proposed commitments.

Paramount Takes the Lead in Changing Licensing Practices

To address the Commission’s competition concerns, Paramount has offered the following commitments, which would apply throughout the EEA:

  1. When licensing its film output for PayTV to a broadcaster in the EEA, Paramount Pictures would not introduce contractual obligations, which prevent or limit a PayTV broadcaster from responding to unsolicited requests from consumers within the EEA but outside of the PayTV broadcaster’s licensed territory;
  2. When licensing its film output for PayTV to a broadcaster in the EEA, Paramount Pictures would not introduce contractual obligations, which require Paramount to prohibit or limit PayTV broadcasters located outside the licensed territory from responding to unsolicited requests from consumers within the licensed territory;
  3. Paramount Pictures would not seek to bring an action before a court or tribunal for the violation of an existing agreement licensing its film output for PayTV;
  4. Paramount Pictures would not act upon or enforce an existing agreement licensing its film output for PayTV.

Rate Cards for Pay-TV and SVOD licensing agreements between Starz and Sony Pictures Television for past, present and future content.

The SPC Advance Report includes licensed guarantees for 175 films released by Sony Pictures Classics, spanning all major genres.

Commitments Apply to SVOD

The commitments would apply for a period of five years and cover both standard PayTV services and, to the extent that they are included in the licence(s) with a broadcaster, subscription video-on-demand services (SVOD). The commitments would cover online services and satellite broadcast services.

RELATED: ERASING TERRITORIAL BARRIES IN THE EU

What’s At Stake?

If Paramount breaks such commitments, the Commission can impose a fine of up to 10% of the company’s worldwide turnover, without having to find an infringement of the EU antitrust rules.

The Commission’s investigation is continuing regarding the conduct of Disney, NBCUniversal, Sony, Fox, Warner Bros and Sky.