Hollywood Studios Catch Heat in Europe

(CN) - EU movie fans are unfairly blocked from accessing Sky UK's pay-per-view content thanks to restrictive agreements forced on the network by six U.S. film studios, the European Commission said Thursday.

The regulatory body formally charged the United States' biggest studios - Disney, NBCUniversal, Paramount, Sony, 20th Century Fox and Warner Bros. - with forcing Sky to block EU viewers outside Great Britain and Ireland from accessing its pay-per-view content through restrictive licensing agreements.

Without the agreements, Sky would be free to sell its pay-TV service to customers across the continent - where allowed by national copyright law and regulations, the commission said.

But antitrust regulators said the restrictions also benefit Sky, since it gives the network "absolute territorial exclusivity" to broadcast the studios' films in the U.K. and limits cross-border competition.

The commission opened similar investigations against other EU pay-TV providers and the U.S. studios in 2014. That probe - which regulators said is still ongoing - involves Canal Plus of France, Sky Italia, Sky Deutschland, and DTS in Spain.

"European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU," said competition-policy commissioner Margrethe Vestager. "Our investigation shows that they cannot do this today, also because licensing agreements between the major film studios and Sky UK do not allow consumers in other EU countries to access Sky's UK and Irish pay-TV services, via satellite or online. We believe that this may be in breach of EU competition rules. The studios and Sky UK now have the chance to respond to our concerns."

The commission's investigation is tied to the EU's broader effort to break down digital borders across the continent.

Earlier this year, the commission laid down its blueprint for a single digital market for the EU in a bid to dump the patchwork of 28 different member-state laws that currently govern the continent's technology sector.

The plan would also reform EU copyright law to do away with cross-border licensing restrictions that block would-be viewers from accessing content online from a provider outside their member state.

Meanwhile, the formal charges against the movie studios and Sky - called a statement of objections - give them an opportunity to view the commission's investigation file and respond, either in writing or in a formal hearing with commissioners and national regulators.

After all parties have exercised their rights of defense, the commission makes its final decision. A finding that EU antitrust laws have been broken could result in fines or a lawsuit.

There is no legal deadline to complete the investigation, the commission said.

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