French Broadcaster Defeats Film Antitrust Deal at EU High Court

A man walks by the European Court of Justice in Luxembourg. (AP Photo/Geert Vanden Wijngaert, File)

LUXEMBOURG (CN) — French media company Canal+ prevailed over European Union competition regulators Wednesday in its challenge to a settlement agreement that prevents companies from blocking content based on location.  

The European Court of Justice sided with the Paris-based premium TV provider, which was fighting a 2016 antitrust deal between the European Commission and U.S. film studio Paramount over so-called geo-blocking practices. 

“By adopting the decision at issue, the Commission rendered the contractual rights of the third parties meaningless, including the contractual rights of Groupe Canal + vis-à-vis Paramount, and thereby infringed the principle of proportionality,” according to a press release from the Luxembourg-based court. The ruling was not immediately available in English.

In 2014, Canal+ signed a contract with Paramount for the rights to broadcast its films in France. A year later, the European Commission, the EU’s executive arm, launched an antitrust investigation into the relationship between U.S. TV and film producers and European premium television companies. 

The commission found that British broadcasting giant Sky and six major U.S. film studios, including Paramount, conspired to prevent continental European consumers from having access to their movies through geo-blocking, which involves companies restricting access to content based on geographic location. The EU sees the practice as an anti-competitive move that violates the bloc’s single market system.

Paramount settled with the EU in 2016 and agreed to drop the restrictive licensing agreements, which effectively killed the deal it had with Canal+. The French broadcaster brought a complaint to the European General Court, the EU’s lower court, in 2018. 

Canal+ argued that geographically restricted licensing agreements are valid under EU intellectual property regulations. The commission contended that such agreements were a threat to the EU’s single market.

The General Court sided with the commission in 2018 and Canal+ appealed to the Court of Justice, which ruled Wednesday that Paramount’s settlement agreement disproportionately harmed the company. 

“The principle of proportionality requires that the rights of these third parties are not completely eroded,” the five-judge panel wrote, finding the lower court had not sufficiently considered how other companies were impacted by the deal.

“The General Court did not examine in detail the economic and legal context of the clauses in question,” the ruling states.

The decision, which is final and cannot be appealed, is the latest blow to EU antitrust regulators. Earlier this year, the bloc’s high court scrapped a $15 billion fine against Silicon Valley giant Apple that the European Commission had levied for sweetheart tax deals with Ireland. In 2019, the court tossed out a $37 million fine against HSBC after the commission claimed the London-based bank, along with several other financial institutions, colluded to manipulate prices on the EU futures market. 

Wednesday’s ruling is the second recent win at the court for the French media conglomerate Vivendi, which owns Canal+ as well as Universal Music Group and Dailymotion. In September, the Court of Justice ruled Vivendi could purchase a 28.8% stake in Italian media company Mediaset. The Italian telecommunications regulator had blocked the deal, claiming it violated national rules over media ownership. 

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