Paramount Pictures Agrees Terms With EU Antitrust Regulator

BRUSSELS—The European Union's antitrust regulator on Tuesday said it accepted concessions offered by Paramount Pictures to satisfy Brussels' concerns about contracts signed with Sky UK Ltd. to license films.

The European Commission, the bloc's top antitrust authority, last July took aim at Hollywood, filing formal charges against six major U.S. film studios and pay-TV broadcaster Sky UK over alleged illegal licensing agreements. The contracts see these studios license their output of films over a certain period for pay-TV to Sky UK.

The EC accused the companies of violating competition laws by using clauses that restrict access to Sky's services outside the U.K. and Ireland, in a move that could recast how pay-TV is sold and viewed in Europe.

To assuage those concerns, Viacom Inc.-owned Paramount Pictures in April offered, when licensing a film to a pay-TV broadcaster in the European Economic Area, not to impose contractual obligations which prevent that broadcaster from making the film available to consumers in another country.

Paramount also said it would not seek to bring an action before a court or tribunal on violations of current contracts which prevent broadcasters making a film available to consumers in another country.

The EC said the concessions will now be made legally binding on Paramount. The commitments apply for five years and cover standard pay-TV services and subscription video-on-demand services. They also cover both online services and satellite broadcast services.

The commission can fine Paramount up to 10% of the company's global revenue if it violates the commitments.

The EC said it continues to investigate Walt Disney Co., Comcast Corp.'s NBCUniversal, Sony Corp.'s Sony Pictures Entertainment Inc., 21st Century Fox's Twentieth Century Fox and Time Warner Inc.'s Warner Bros. Entertainment.

21st Century Fox Inc. was until 2013 part of the same company as Wall Street Journal owner News Corp. Sky PLC is 39%-owned by 21st Century Fox.

The investigation comes amid a broader push by the EU to eradicate barriers to a single market for digital services in the region. Regulators are focusing in particular on eliminating "geo-blocking," where companies restrict access to films or other online content outside a particular licensed territory.

Write to Natalia Drozdiak at [e-mail]

(END) Dow Jones Newswires

July 26, 2016 07:25 ET (11:25 GMT)

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