On 13 January 2014 the European Commission finally announced a long overdue initiative to promote the freedom of movement of electronic content services in the internal market (see also this press release). The initiative is not based on Internal Market principles, but rather on antitrust considerations. The reason for this is, most probably, that the realisation of Internal Market objectives requires legislative action. Such action requires the support of the Council (i.e. the Member States) and the European Parliament and would therefore most likely be bound to fail. Trying to reach the same goal through antitrust action is faster as it can influence the behaviour of market parties directly and does not require new legislation.
The Commission suspects that the right to freedom of movement of the above services is hampered by contractual arrangements between film studios and pay TV broadcasters. The Commission was triggered by a recent Decision by the EU Court of Justice in a case concerning the satellite broacasting of football matches (the Premier League Case, also often referred to as the Murphy Case).
The Commission will investigate whether there are any restrictions in agreements between film studios and pay TV broadcasters that grant ‘absolute territorial exclusivity’ to the broadcasters. Such provisions prevent the selling of content services in response to unsolicited requests from viewers located in other Member States and the delivery of those services to existing subscribers who are located or who travel outside the licensed territory. The Commission believes that such provisions might infringe the EU antitrust rules, which prohibit anticompetitive agreements.
The Commission intends to examine if the principles set out by the EU Court of Justice should also be applied to other types of audiovisual content (apart from sports events) such as the films licensed by U.S. studios.
From a user perspective, the Commission’s initiative should be welcomed; users should not be deprived of access to content services which they are entitled to use for reason that they paid for it. From a rightsholder perspective, there’s no reason to fear that they will no longer be able to sell their rights on a territorial basis; they can continue to do so, but they will have to accept that users who subscribe to a content service under the conditions which apply within a certain territory, should consequently be able to access the service from anywhere within the Internal Market.