The European Commission has accepted commitments offered by The Walt Disney Co, NBC Universal Media LLC, Sony Pictures Entertainment Inc., Warner Bros Entertainment Inc. and Sky TV to put an end to the practice of "geo-blocking" in order to allow EU consumers outside Britain and Ireland to access films online or via satellite. The question that should be asked is whether doing so was premature, in light of a possible no-deal Brexit and the uncertainty of the EU's ability to enforce its rules over UK media companies.
It has been standard practice for studios to licence audiovisual content to broadcasters on an exclusive territorial basis. However, the commitments have been given in response to an investigation by the Commission which found that the companies were involved in anti-competitive behaviour through these business practices. The studios have now agreed not to apply clauses that prevent EU consumers from subscribing to Sky's pay services. Sky, in turn, has agreed that it will no longer apply its current clauses that require film studios to ensure that their movies are not available on rival pay-TV services in Britain and Ireland. Sky has further agreed not to reintroduce such clauses in future film licensing contracts.
Sky's commitment would seem the bigger concession – as it self-imposes a restriction on future deals and arguably prevents Sky from being able to effectively future proof against the possible changes in this area after Brexit. Subject to any transitional arrangement that may be contained in a withdrawal agreement, once the UK leaves the EU, traders and broadcasters established in the UK would no longer be subject to the same prohibitions on geo-blocking. Sky's commitment that it will not introduce geo-blocking clauses in its new or renewal film licensing contracts, therefore, could be premature given the on-going uncertainties of the Brexit negotiations and the fact that those agreements will continue irrespective of the Brexit outcome.
Thanks to Fieldfisher Trainee Rachel Bowley for authoring this article.
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