By Juergen Baetz
BRUSSELS (AP) --The European Union's antitrust watchdog is investigating whether major U.S. film studios' practice of selling rights to European pay TV broadcasters for only one country at a time is hurting competition.
The studios typically demand clauses in their contracts with European pay TV broadcasters limiting film rights to only their home country, rather than across the EU's 28 states. The European Commission, the EU's executive arm, said Monday it is investigating the legality of such clauses.
"Such provisions might constitute an infringement of EU antitrust rules," said Commissioner Joaquin Almunia, the bloc's antitrust chief. "More and more European citizens watch films, use pay TV services broadcast by satellite and increasingly available through online streaming," he told reporters in Brussels.
The probe covers Time Warner Inc.'s Warner Bros. studio, Comcast Corp.'s NBCUniversal, Viacom Inc.'s Paramount Pictures and Sony Pictures.
Another studio targeted, Twentieth Century Fox, is part of 21st Century Fox Inc., an entertainment giant controlled by Rupert Murdoch that also holds large stakes in European pay TV broadcasters at the other end of the EU investigation, such as Britain's BSkyB, Sky Italy and Sky Germany.
Contract clauses granting "absolute territorial protection" might be forcing pay TV operators such as France's Canal Plus, Spain's DTS or the Sky channels to refuse subscribers from other EU nations, according to the Commission.
The question is, for example, whether a subscriber to a German pay TV channel should be able to watch his content when using his laptop to stream it online while on vacation in another EU nation, he said.
"Or if you live in Belgium and you want to subscribe to a Spanish pay TV service, (you) may not be able to subscribe at all if there's absolute territorial exclusivity," Almunia said.
Almunia specified, however, that the investigation doesn't question all forms of territorial limitations and doesn't aim at introducing flat-out European contracts instead of national ones.
The Commission has no legal deadline to complete its antitrust inquiries. If it finds violations of competition rules, it can hand firms fines worth a percentage of the annual sales of the relevant products, capped at a maximum of 10 percent of a firm's overall annual revenues.
The bloc's top court, the EU Court of Justice, in 2011 found in a case involving territorial licensing restrictions for Premier League football matches that they eliminate competition between broadcasters and partition the market according to national borders, the Commission said.
Regarding football rights "these exclusivity conditions are being eliminated or have been eliminated" following the court ruling, Almunia said. On film rights, however, such clauses of territorial exclusivity still exist, he added.
"We will carefully examine the principle set out by the court," Almunia said.
Civil rights groups call on major corporations to stick with DEI programs
A broad group of civil rights organizations called on the CEOs and board members of major companies Thursday to maintain their commitments to diversity, equity and inclusion initiatives that have come under attack online and in lawsuits.
An open letter signed by 19 organizations and directed at the leaders of Fortune 1000 companies said companies that abandon their DEI programs are shirking their fiduciary responsibility to employees, consumers and shareholders.
The civil rights groups included the NAACP, the National Organization for Women, the League of United Latin American Citizens, Asian Americans Advancing Justice and the Human Rights Campaign Foundation.
"Diversity, equity and inclusion programs, policies, and practices make business-sense and they're broadly popular among the public, consumers, and employees," their statement read. "But a small, well-funded, and extreme group of right-wing activists is attempting to pressure companies into abandoning their DEI programs."
Companies such as Ford, Lowes, John Deere, Molson Coors and Harley-Davidson recently announced they would pull back on their diversity, equity and inclusion policies after facing pressure from conservative activists who were emboldened by recent victories in the courtroom.
Many major corporations have been examining their diversity programs in the wake of a Supreme Court decision last year that declared race-based affirmative action programs in college admissions unconstitutional. Dozens of cases have been filed making similar arguments about employers. Critics of DEI programs say the initiatives provide benefits to people of one race or sexual orientation while excluding others.
In their letter, the civil rights organizations, which also included... Read More