At the end of last year, the Prosecution Body of the Belgian Competition Authority dismissed a complaint brought by cinema operator NV Handling CO against American film studios such as Walt Disney, Century Fox, Sony Pictures, Universal and Warner Bros in relation to the digitalization of European movie theatres and the investments involved.
The major US film studios decided to contribute financially to the transition from traditional projection to digital projection by cooperating with so-called “integrators” that finance, install and maintain digital projection equipment. In return for their services, these integrators receive a “Virtual Print Fee” until they have recouped their investment.
However, NV Handling Co decided to digitalize its cinema at its own cost and thus without the help of an integrator. As a consequence, the defendants in this case refused to respond positively to its demand for a Virtual Print Fee.
The Belgian Prosecution Body sided with the US studios and found that their refusal was objectively justified. By cooperating with integrators, the cinemas benefited from a less expensive digitalization.
It also noted that the agreements between the US studios and the integrators did not disclose conditions which restricted competition, as had already been examined by the European Commission (see IP/11/257).