Italy: Territorial Exclusivity Agreements On Transmission Of Football Matches Appears Contrary To EU Law

On February 3 2011 the European Court of Justice (ECJ) Advocate General Juliane Kokott issued a nonbinding opinion that broadcasters cannot prevent consumers in the United Kingdom from using cheaper foreign satellite television equipment to watch Premier League football matches, as this is contrary to the free movement of services within the European Union (Premier League and others v QC Leisure and others and Karen Murphy v Media Protection Services Ltd, joined cases C-403/08 and C-429/08).

If followed by the ECJ, this approach could pave the way for a revolution in the sale of televised sports rights in Europe.

Background

The Football Association Premier League Ltd (FAPL) is the marketing organisation for England's top professional football league. The FAPL grants its licensees (at present, BSkyB and ESPN) the exclusive right to broadcast and economically exploit matches within their respective broadcasting areas. In order to safeguard this exclusivity, licensees must prevent their broadcasts from being available for viewing outside their respective broadcasting areas.

Each licensee must encrypt its satellite signal and transmit it in encrypted form to subscribers within its assigned territory. Subscribers can decrypt the signal using a decoder, which requires a decoder card. The exclusivity agreement also imposes restrictions on the circulation of authorised decoder cards outside the territory of each licensee.

Facts

Ms Karen Murphy, the landlady of the Red, White and Blue pub in Portsmouth, England, found a cheap means of showing Premier League football in her pub: she took out a subscription, complete with decoder box and viewing card, with Greek satellite broadcaster NOVA. Murphy considered the monthly subscription to the United Kingdom's exclusive broadcasters to be unaffordable.

In January 2007 Murphy was convicted of fraudulent reception of transmissions under Section 297(1) of the Copyright, Designs and Patents Act, as she had dishonestly received "a programme included in a broadcasting service provided from a place in the United Kingdom with intent to avoid payment of any charge applicable to the reception of the programme".

Murphy appealed to the UK High Court, which requested an opinion from the ECJ.

The ECJ was also requested to issue a preliminary ruling on the action brought by the FAPL against companies importing decoder cards from Greece and certain Middle Eastern states into the United Kingdom, where they were offered to pubs at more favourable prices than those available from the licensed broadcaster.

The advocate general's opinion addresses some significant issues relating to broadcast and copyright laws, competition law and EU fundamental freedoms.

EU Conditional Access Directive

The first question for the ECJ was whether a decoder card, lawfully manufactured and marketed in Greece, becomes an 'illicit device' under the EU Conditional Access Directive (98/84/EC) once imported into the United Kingdom. Article 2(e) states: "'[I]llicit device' shall mean any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider."

In the view of the FAPL, it was sufficient for that purpose that the decoder cards were used in the United Kingdom to receive transmissions from the Greek broadcaster, and that receiving such in that place was against the will of the relevant rights holder.

However, the advocate general considered that the decoder card was designed precisely to provide access with the service provider's authorisation – the service provider (ie, the Greek broadcaster) had placed it on the market specifically for that purpose. Moreover, a decoder card is not 'adapted' by virtue of importation into the United Kingdom.

Reproduction right

The High Court asked whether the digital communication of broadcasts affects the author's right in the reproduction of the work. For technical reasons, the communication of digital programmes requires short sections of the broadcast to be stored in the decoder's memory buffer.

The advocate general first clarified that:

  • the reproduction right applies to live transmissions;
  • acts of reproduction occur where frames of digital video and audio content are created in a decoder's memory, as these frames are part of the intellectual creation of the author of the broadcast; and
  • the display of a broadcast on a screen constitutes reproduction.

Therefore, the temporary storage of frames of a transmission in a decoder's memory and their display on a television screen may infringe the right to control reproduction, as such right is conceived of in broad terms under Article 2 of the EU Copyright Directive (2001/29/EC) as including direct and indirect, temporary and permanent reproduction, by any means and in any form, in whole or in part.

However, in the advocate general's opinion the copies created in a decoder's memory may benefit from the exception in the directive, which under Article 5(1) allows for temporary storage (which has no independent economic significance in itself) for technological reasons. In contrast, transient copies of a work created on a television screen that is linked to a decoder box have economic significance.

Right of communication to the public

The advocate general rejected the FAPL's copyright argument that showing live transmissions of football matches in pubs infringes the exclusive right of communication to the public that attaches to protected works.

In this regard, the advocate general explained that as EU law stands, no comprehensive rights protect the communication of a broadcast to the public if no entrance fee is charged to view the broadcast.

Freedom to provide services

The advocate general considers that the resolution of the cases in the proceeding in question essentially depends on the application of the freedom to provide services under Article 56 of the Treaty on the Functioning of the European Union, the disputed issue being the use of cards to gain access to encrypted programmes in the United Kingdom.

In the advocate general's opinion, the selling of sports distribution rights on a country-by-country basis through exclusive agreements has the effect of partitioning the internal market into separate national markets, seriously affecting the freedom to provide services.

Therefore, the advocate general's advice to the ECJ is to interpret such fundamental freedom as excluding the enforcement of rights to satellite programmes whereby rights holders can prohibit third parties (to which they are not contractually linked) from watching and showing such programmes in EU member states other than those intended by the rights holder. The exercise of such rights would prevent the use of services from other member states (ie, access to television programmes).

The advocate general found that the impairment of the freedom to provide services was not justified by the protection of IP rights, such as the rights in the transmission of football matches. Rather, the live transmission of Premier League football matches is exploited through the charge imposed for decoder cards. In the advocate general's opinion, the economic exploitation of the rights in question is not undermined by the use of foreign decoder cards insofar as the corresponding charges have been paid for those cards. The charges in question are lower than those imposed in the United Kingdom, but the advocate general stated that there is "no specific right to charge different prices for a work in each member state. Rather, it forms part of the logic of the internal market that price differences between different member states should be offset by trade".

The marketing of broadcasting rights on the basis of territorial exclusivity is tantamount to profiting from the elimination of the internal market.

Moreover, the advocate general considered that the application of the principle of the freedom to provide services is in line with the EU Satellite and Cable Directive (93/83/EEC) and with European competition law.

UEFA and British Sky Broadcasting Ltd v Euroview Sport Ltd

A similar case is pending before the ECJ. The Union of European Football Associations (UEFA) issued proceedings against Euroview, an importer of decoder cards into the United Kingdom. Use of the cards allows pubs or other users in the United Kingdom to show UEFA Champions League and Europa League football matches that are broadcast from outside the United Kingdom.

The High Court has referred to the ECJ for a preliminary ruling at UEFA's request. The ruling on FAPL's case is likely to indicate the outcome of UEFA's case.

Comment

Opinions from the advocate general are not binding on the ECJ, but are followed in around 70% of cases. The ECJ is expected to rule on the case in the next few months. The potential impact on rights holders and pay-television prices is huge. If the ECJ follows the advocate general's views, the FAPL might be forced to offer pan-European rights deals in order to allow competition between broadcasters across the European Union.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions