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Law Society Gazette | gazette.ie Jan/Feb 2017
BRIEFING | EURLEGAL
67
by-case basis. This conduct may
infringe EU competition rules.
However, if a non-dominant company
makes an independent business
decision not to sell abroad or
indeed via the internet, article 101
of the TFEU does not apply. The
commission’s final report is due to
be published later this year.
THE COOPERATION OF THE FILM STUDIOS
WOULD BE INSUFFICIENT TO MEET THE
COMMISSION’S OVERALL OBJECTIVE OF
PROMOTING THE CROSS-BORDER PROVISION
OF BROADCASTING SERVICES
Copyright rules
Paramount’s decision to settle
needs to be examined against the
background of EU intellectual
property rules. Article 3 of the
EU Copyright Directive (2001/29/
EC) provides that film-makers
have the exclusive right to allow
or prevent the making available
to the public of their movies, including
the making available of
their works in such a way that
members of the public may access
them from a place and at a time
individually chosen by them. Accordingly,
notwithstanding the
relevant article 9 commitments,
‘passive sales’ of pay-TV subscriptions
for premium film content
may be precluded by national
copyright rules.
Next steps
As stated above, Paramount’s
settlement decision does not signal
the end of the commission’s
investigation of the other major
US film studios. Time will tell
whether these proceedings result
in other settlements or, alternatively,
infringement decisions.
The commission will, of course,
be mindful that article 9 investigations
do not require the same
degree of legal and economic
rigour as article 7 infringement
cases. Moreover, the actual issue
of whether the prevention of the
cross-border provision of pay-TV
services is anticompetitive has not
been decided, since Paramount
settled without admitting any
breach of article 101. If none of
the other film studios follow Paramount’s
lead, it could, therefore,
be some time before the commission’s
investigation is concluded.
(That said, it will be very difficult
for the commission to drop the
other cases where one film studio
has tacitly admitted defeat.)
Moreover, the chances of a
lengthy investigation have only
been increased by the December
2016 decision of the French
pay-TV company, Canal Plus,
to seek to have the Paramount
settlement decision annulled by
the EU’s General Court. Canal
Plus is claiming that this settlement
undermines the EU system
of film financing, which relies on
broadcasters being able to use
varying release dates and pricing
strategies in different countries
throughout the EEA. Indeed, this
challenge has apparently resulted
in the commission seeking further
information from Sky and
the five other US studios on the
likely effect of any changes to the
financing of independent film
production.
Wider implications
Given its goal of promoting European
market integration, the
commission’s ultimate preferred
outcome is that the relevant
pay-TV programmes are available
across borders in the EEA.
While Paramount has agreed not
to enforce its copyright protection
against Sky (or indeed any
other broadcaster that wishes to
respond to an unsolicited request
from an EEA customer based
outside Ireland and Britain), this
does not mean that a pay-TV
broadcaster is obliged to provide
the relevant services cross-border.
Moreover, other film studios
are not, pending the outcome of
the commission’s investigation,
legally obliged to follow Paramount’s
example.
In any event, the cooperation
of the film studios would be insufficient
to meet the commission’s
overall objective of promoting the
cross-border provision of broadcasting
services, since the pay-TV
companies must also decide to
respond positively to any request
for passive sales. This would require
these broadcasters to breach
national copyright law in the EU/
EEA member state where the
would-be viewer is based. However,
it may not be in Sky’s – or
indeed other pay-TV companies’
– respective interest to infringe
copyright rules, since this would
likely undermine their individual
chances of winning future content
licensing award processes. In
brief, far-reaching reform of the
Copyright Directive is required before
the commission’s aim of significantly
increasing cross-border
sales of pay-TV is realised.
Cormac Little is a partner and head
of the competition and regulation department
in William Fry, Solicitors.
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