Summary
The Advocate General has provided an opinion on questions
referred to the ECJ by the High Court in Football Association
Premier League Ltd & Others v QC Leisure & Others and Karen
Murphy v Media Protection Services Ltd. The opinion recommends
that certain licences for broadcasting rights to football matches,
which state that the broadcaster can only broadcast content in a
particular area and the broadcaster must prevent access to its
service outside its exclusive territory, have the effect of
preventing and distorting competition. Such licences have the
effect of partitioning the internal market and restrict the freedom
to provide services.
If the ECJ were to follow the Advocate General's opinion then
this could potentially result in a significant change to the way in
which broadcasting rights are licensed through out the EU and may
result in the conclusion that such rights would need to be sold on
an EU-wide basis.
To view the article in full, please see below:
Full Article
Background
The Football Association Premier League Ltd ("FAPL")
co-ordinate the filming of Premier League football matches and then
licence the rights to use them. The broadcasting rights are
licensed on an exclusive basis in various distinct territories
within the EU. Indeed, the contracts contain an exclusivity clause
stating that the FAPL will only appoint one broadcaster per
territory. Licensees must also agree to take steps to prevent their
broadcasts being viewed outside their prescribed area. This is done
by broadcasters encrypting their signal. Subscribers purchase a
decoder card which decrypts the signal, and sales of such decoder
cards are restricted to only being made within the licensed
territory.
However, a number of companies import decoder cards from other
territories into the UK. These are then sold on (in particular to
pubs and bars) to facilitate access to the broadcasts at a lower
cost than the equivalent UK package.
FAPL commenced two actions. A civil action was brought against a
number of importers of decoder cards and publicans alleging breach
of the Copyright, Patents and Designs Act 1988. Furthermore, Media
Protection Services Limited, FAPL's agent, brought criminal
proceedings against Karen Murphy, the landlady of a pub, who showed
Premier League matches using a Greek decoder card. A fine was
imposed against Ms Murphy on the grounds that the decoder card was
an illicit device within the meaning of the Conditional Access
Directive. Ms Murphy appealed the decision to the High Court.
The High Court raised a number of questions for the ECJ including
whether or not the licence agreements were compatible with the EU
principles of freedom to provide services and on the prohibition of
agreements that prevent, restrict or distort competition within the
internal market. Questions were also raised on whether the decoder
card constituted an illicit device under the definition in the
Conditional Access Directive and whether or not the broadcasting
involved the creation of temporary reproductions under the
Copyright Directive.
The Opinion
The Advocate General stated that:
"where a programme content provider enters into a series
of exclusive licences each for the territory of one or more Member
States under which the broadcaster is licensed to broadcast the
programme content only within that territory (including by
satellite) and a contractual obligation is included in each licence
requiring the broadcaster to prevent its satellite decoder cards
which enable reception of the licensed programme content from being
used outside the licensed territory, such licence agreements are
liable to prevent, restrict or distort competition. They are
therefore incompatible with Article 101(1) TFEU; it is not
necessary to show that such effects have actually
occurred."
The territorial exclusivity rights granted by FAPL impair the
freedom to provide services. The licences have the effect of
partitioning the internal market into quite separate national
markets. The Advocate General found no justification for this
restriction.
The Advocate General further stated that there was no specific
right to charge different prices for a work in each Member State.
Rather it was the logic of the internal market that price
differences should be offset by trade.
Comment
The ECJ are yet to provide a decision on this and are not
obliged to follow the Advocate General's opinion. However, if
the ECJ do choose to follow the Advocate General's opinion,
then there may be a resulting fundamental change in the way sports
broadcasting rights are licensed. Indeed, rights may be licensed on
an EU-wide basis rather than on an individual country basis.
Alternatively, consumers may benefit from having access to cheaper
broadcasts by subscribing to foreign broadcasters and using their
decoder cards.
The full text of the Advocate General's opinion can be accessed
here.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 16/02/2011.