The European Court of Justice ("ECJ") may be set to call time on the ability of broadcasters to object to pubs and bars that use foreign satellite equipment to show subscription television. This will undoubtedly cause concern among broadcasters who have, until now, widely viewed exclusive rights to broadcast within a certain territory as affording enforceable protection.
In light of a recently issued Opinion by Advocate General Kokott, doubts have arisen as to the enforceability and legality of exclusive territorial licenses under European law. Indeed, Kokott noted that such partitioning of the subscription television market in Europe could constitute a serious impairment of the freedom to provide services within the Common Market.
Following the Advocate General's opinion, it will now fall to the ECJ to officially consider the status of those who use foreign pay-tv services contrary to a domestic provider's territorial exclusivity. The issue has come under the scrutiny of the ECJ as the result of two separate referrals on the matter from English courts.
One widely-publicised case concerns proceedings brought by a UK broadcaster against a pub landlady, who had been using Greek satellite equipment to broadcast football matches in her pub. The second case concerns a more general attempt by the Football Association Premier League - the body who markets and sells the broadcasting rights of the English Premier League - to pursue civil action against the use of foreign satellite equipment in the UK.
In her preliminary Opinion, Kotkott addressed the questions of European law interpretation referred by the English courts. Kokott noted that the true value of live football broadcasting rights lies in their commercial exploitation, in particular, through the charges imposed for the satellite equipment and decoder cards necessary to access the signal. Importantly, however, Kokott believes that this commercial exploitation is not undermined by the use of foreign satellite equipment, as the equivalent charges have been paid in the country of origin. While these charges are generally cheaper than those on offer in the UK, Kokott stressed that there is no right to charge different prices across different Member States - rather, one of the principal purposes of European free trade is to offset such divergences.
Further, Kokott noted that any contractual restriction on the use of satellite equipment imposed in the State of origin - for example, restricting access to private use - is itself insufficient to justify a territorial restriction on the freedom to provide services under European law.
Addressing other grounds of contention under European law, Kokott again sided against the interpretations favoured by broadcasters. In particular, Kokott expressed doubt that the use of a foreign decoder card in a pub contravenes European copyright protection. Further, Kokott believed that the use of foreign satellite equipment does not contravene the protection offered to encrypted signals by the Conditional Access Directive (98/84/EC).
While greater choice in the market for subscription television would likely be welcomed by pubs, particularly in the current economic downturn, broadcasters will be equally keen to ensure a level of protection for their significant investments in premium sports broadcasting rights. Stakeholders may well have to wait another year before the ECJ rules on the issue. However, with the strongly-worded Opinion of Advocate General Kokott, could this be last orders for broadcasting exclusivity?
The full text of the Opinion is available by clicking here.
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The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
