The Court of Justice of the European Union (the "Court") has on Tuesday 4th October 2011 confirmed that the sale in one Member State of decoders designed to decipher encrypted foreign TV broadcasts from another Member State cannot be prohibited in a Member State even if such decoders have been acquired by the purchaser through a false name and address. The decision may open the floodgates to increased competition in sports broadcasting.
In (C-403/08) Football Association Premier League and Others, the Court said that English legislation prohibiting the sale in the UK of foreign decoders, which give access to satellite broadcasting services from other Member States, constitutes a restriction on competition unless it can be objectively justified. However, according to the Court, prohibiting the sale of foreign decoders cannot be objectively justified on the basis of protecting the intellectual property rights of a rights holder. Furthermore the restriction cannot be justified on the basis that it encourages the public to attend football stadiums.
The Court said it is a breach of competition law for sports bodies, such as the Premier League, and broadcasters to agree exclusive licences which in effect oblige the broadcasters not to supply decoders to foreign customers.
The decision means that individual consumers will be free to pay to watch Premier League football matches from overseas broadcasters using foreign cards and decoders. However, while this is the position for consumers watching broadcasts privately, this is not necessarily the case for pubs and bars.
This is because the Court accepted that a broadcast of a football match may contain copyright works, even though the Court found that the game itself is not protected by copyright. Elements of the broadcast protected by copyright may include the opening video sequence, the Premier League anthem, pre-recorded films showing highlights of recent Premier League matches, and various graphics. Copyright is infringed by communicating these works to the public under Article 3(1) of the Copyrights Directive. The Court said that under Article 3(1) "communication to the public" would include any transmission of broadcast works, via a television screen and speakers, to customers present in a public house. Accordingly, a pub or bar using a foreign decoder will need to ensure it holds the right licence with the foreign broadcaster concerned, otherwise it may breach Article 3(1) by communicating protected works to the public without permission.
In the UK, the decision is likely to have a significant effect on BSkyB and the Premier League and the way sports agreements are structured. The Premier League will need to ensure its agreements with European broadcasters do not contain provisions which prevent or limit the sale of decoders to consumers in one Member State only.
Opinion seems clear that in the short term the decision is likely to benefit consumers through cheaper prices of foreign decoders and premiership matches. The decision will also make it easier to watch matches at 3pm on Saturday afternoons, traditionally not shown on Sky until later in the afternoon so as not to cannibalise attendance at football matches. However it is questionable whether this will last. The Premier League is presumably now considering how best to offset the effect of the decision and one way would be to reduce the disparity of its pricing structure with European broadcasters.