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Archive for July 27th, 2016

The Commission accepts Paramount’s commitments: what limits for remedies in EU competition law?

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The Outer Limiits KI

The Commission announced yesterday that it has accepted the commitments submitted by Paramount. This is an important landmark in the Pay-TV case [Alfonso, who is representing an interested party, already wrote about Paramount’s commitments here]. It is in any event far from being the last chapter. There are no indications that the other major studios are willing to follow the same path.

The commitments offered by Paramount are very far-reaching, but not totally unheard of. As I understand them, Paramount has committed not to enforce its intellectual property rights against Sky (or any other broadcaster). More precisely, it has accepted not to require by contract the respect of copyright legislation and not to bring an action against Sky when the latter responds to unsolicited offers from subscribers based in EEA Member States other than the UK (sigh) and Ireland. The latter commitment may sound surprising, but we know at least since Huawei that enforcing intellectual property before a court may be a breach of competition rules.

What is truly extraordinary about these commitments is what the Commission does not say about them. The remedy package may not work at all, and it is likely that the Commission will not reach the outcome it wishes (i.e. that copyright-protected content is offered online across borders). One obvious reason is that taking action against a single copyright holder does not really change anything for as long as the legal status of the contested practices remains unclear.

The second reason is perhaps the most interesting. For these commitments to achieve anything meaningful, Sky (or any other broadcaster) would have to play the game. In other words, Sky would have to decide that it is willing and able to breach copyright. And I can think of many reasons why it may not be in the interest of a pay-TV operator to do so. If a pay-TV operator decides to undermine the value of copyright in other territories, the studios may decide to license their rights to other operators in the following auction. In addition, licensees in other territories may decide to fight back, making everybody worse off.

The third reason is (sigh) that referendum…

If it is far from clear that the remedies will achieve the outcome desired by the Commission, it is almost certainly because there was not a competition law problem in the first place. If you can’t fix it, it ain’t broke.

Written by Pablo Ibanez Colomo

27 July 2016 at 1:54 pm

Posted in Uncategorized