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.

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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.