On 23 July 2015, the European Commission (the "Commission") sent a Statement of Objections to BSkyB and six major studios: Disney, NBC Universal, Paramount Pictures, Sony, Twentieth Century Fox and Warner Bros (the "Film Studios"). The Statement of Objections sets out concerns that the Film Studios' licensing agreements may breach competition law.
The licensing agreements in question require BSkyB to block consumers from outside the UK and Ireland accessing its pay-TV services. Some agreements also require Film Studios to ensure that other European broadcasters (excluding BSkyB) do not make their own pay-TV services available within the UK or Ireland.
The Commission believes that these agreements grant "absolute territorial exclusivity" to BSkyB, therefore eliminating cross-border competition with other broadcasters within the EU. Alongside this, the Commission is considering how best to achieve its aim of a single market in the EU for digital content. In May 2015 the Commission published proposals aimed at ending what it refers to as "unjustified" geo-blocking practices which prevent consumers accessing online content outside their home territory.
BSkyB and the Film Studios now have the right to reply to the Statement of Objections and request an oral hearing. Alternatively, they may seek to negotiate a settlement of the case with the Commission by offering "commitments" which satisfy the Commission's key concerns. The early indications, however, are that they are prepared to fight their case vigorously.
A copy of the Commission's press release can be found here.