Major Hollywood movie studios face European antitrust allegations

European regulators on Thursday opened an antitrust case against six major Hollywood movie studios and British pay-TV provider Sky UK, alleging they have illegally blocked consumers in most of Europe from watching U.S. movies, TV shows and other content.

The studios -- Walt Disney Studios, NBCUniversal, Paramount Pictures, Sony Pictures Entertainment, 20th Century Fox and Warner Bros. -- each face fines of as much as 10% of annual revenues for allegedly entering into improper licensing agreements with Sky UK.

Those contracts prohibit viewers outside Britain and Ireland from accessing Sky UK's programming via satellite or the Internet.

"European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU," said Margrethe Vestager, the EU's commissioner in charge of competition policy.

"Our investigation shows that they cannot do this today," she said.

EU regulators believe the licensing agreements, which require Sky UK to block access to movies and other studio content outside its licensing territory, violate competition rules.

The European Commission, the region's executive arm, sent a so-called statement of objections Thursday to the seven companies. The statement formally launches an antitrust case and comes after an investigation that began in January 2014.

Sky UK said it had received the statement and would "respond in due course."

“The European Commission is examining cross-border access to pay TV services across a number of member states," the company said.

The investigation looked at agreements between the U.S. studios and the largest European pay-TV providers, including Canal Plus in France, DTS in Span, Sky Italia in Italy and Sky Deutschland in Germany.

Regulators said film studios typically license their content to a single pay-TV provider in each European Union country.

But the clauses in the licensing agreements grant "absolute territorial exclusivity" to Sky UK, eliminate competition across country borders between pay-TV providers and "partition the internal market along national borders."

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The European Commission's preliminary view is that such clauses violate rules against anti-competitive agreements.

The commission also said it would propose changes to EU copyright rules to improve access to online content.

Officials want "to ensure that users who buy online content such as films, music or articles at home can enjoy them while traveling across Europe," the commission said. Copyright licensing agreements can prevent that access.

Follow @JimPuzzanghera on Twitter.

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