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EU opens antitrust case against major US studios and Sky UK

EU opens antitrust case against major US studios and Sky UK

BRUSSELS: Along with the proliferation of web-based television services and pressure to make movies available for download sooner, Hollywood studios are facing a new challenge to decades-old business practices: European regulators.

The European Union’s top antitrust authority on Thursday charged six American studios and a pay television company in Britain with unfairly blocking access to films and other content.

The move is part of an effort by European Union officials to reduce barriers affecting how digital content is bought and sold in the 28-member bloc. The aim is to unify the market of more than 500 million people, giving Europeans unfettered access to services like movie streaming, online shopping and cloud computing no matter where they live.

The European Commission, the executive arm of the European Union, sent the charges, which are known as a statement of objections, to the British pay-TV broadcaster Sky UK, which is partly owned by 21st Century Fox, and to Disney, NBCUniversal, Paramount Pictures, Sony, Fox and Warner Bros. The charges relate to the studio practice of licensing movies under contracts that require Sky UK to block access for consumers outside Britain and Ireland.

In a statement, Sky UK said it would “respond in due course” to what it called the European Commission’s statement of “preliminary views.” A Warner spokesman said his company was “cooperating fully” with the European investigation, but declined to comment further. NBCUniversal said it would “respond and cooperate,” while Disney said the commission’s analysis was “destructive of consumer value,” and promised to “oppose the proposed action vigorously.” Representatives of the other studios did not comment.

A spokeswoman for the Motion Picture Association of America, which represents all six major studios, said it was not permitted to address issues that involve the companies’ individual commercial dealings.

The studios do not disclose detailed information about their foreign contracts, making it difficult to calculate the precise impact of an unfavorable decision. But the charges threaten to disrupt a longtime business model under which studios and independent film companies have both bolstered profits and catered to different tastes by selling films and television shows on a country-by-country basis.