# C_2016437EN.01000301.xml

| 25.11.2016 | EN | Official Journal of the European Union | C 437/3 |
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25.11.2016

EN

Official Journal of the European Union

C 437/3

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Final Report of the Hearing Officer (1)

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Cross-border access to pay TV content — Paramount commitments

(AT.40023)

(2016/C 437/03)

| (1) | The present report relates to a draft commitments decision under Article 9 of Council Regulation (EC) No 1/2003 (2) (the ‘Draft Decision’) addressed to Paramount Pictures International Limited (formerly Viacom Global (Nederlands) BV) as well as to Viacom Inc. (together ‘Paramount’). |
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(1)

The present report relates to a draft commitments decision under Article 9 of Council Regulation (EC) No 1/2003 (2) (the ‘Draft Decision’) addressed to Paramount Pictures International Limited (formerly Viacom Global (Nederlands) BV) as well as to Viacom Inc. (together ‘Paramount’).

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| (2) | On 13 January 2014 and 23 July 2015, the Commission initiated proceedings within the meaning of Article 2(1) of Regulation (EC) No 773/2004 (3) in respect of suspected infringements of Article 101 TFEU arising from certain clauses included in bilateral agreements concerning the licensing of audiovisual content for pay-TV broadcasting purposes. These proceedings concerned, on one hand, the Sky broadcasting group in particular and, on the other, each of six undertakings (Paramount among them) involved in film production (the ‘Studios’). |
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(2)

On 13 January 2014 and 23 July 2015, the Commission initiated proceedings within the meaning of Article 2(1) of Regulation (EC) No 773/2004 (3) in respect of suspected infringements of Article 101 TFEU arising from certain clauses included in bilateral agreements concerning the licensing of audiovisual content for pay-TV broadcasting purposes. These proceedings concerned, on one hand, the Sky broadcasting group in particular and, on the other, each of six undertakings (Paramount among them) involved in film production (the ‘Studios’).

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| (3) | The Commission adopted a Statement of Objections in Case AT.40023 on 23 July 2015 (the ‘SO’). The SO was addressed to the following legal entities (the ‘SO Addressees’), in seven groups (the ‘Parties’): (i) Sky UK and Sky plc (together, ‘Sky’) (ii) Viacom Global (Netherlands) BV and Viacom Inc. (that is, Paramount); (iii) Universal Studios International BV and Comcast Corporation (together, ‘NBCUniversal’); (iv) CPT Holdings, Inc., Colgems Productions Limited and Sony Corporation (together, ‘Sony’); (v) The Walt Disney Company Limited and The Walt Disney Company; (vi) Twentieth Century Fox Telecommunications International Inc. and Twenty-First Century Fox, Inc. (together ‘Fox’); and (vii) Warner Bros. International Television Distribution Inc. and Time Warner Inc. (together, ‘Warner’). |
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(3)

The Commission adopted a Statement of Objections in Case AT.40023 on 23 July 2015 (the ‘SO’). The SO was addressed to the following legal entities (the ‘SO Addressees’), in seven groups (the ‘Parties’): (i) Sky UK and Sky plc (together, ‘Sky’) (ii) Viacom Global (Netherlands) BV and Viacom Inc. (that is, Paramount); (iii) Universal Studios International BV and Comcast Corporation (together, ‘NBCUniversal’); (iv) CPT Holdings, Inc., Colgems Productions Limited and Sony Corporation (together, ‘Sony’); (v) The Walt Disney Company Limited and The Walt Disney Company; (vi) Twentieth Century Fox Telecommunications International Inc. and Twenty-First Century Fox, Inc. (together ‘Fox’); and (vii) Warner Bros. International Television Distribution Inc. and Time Warner Inc. (together, ‘Warner’).

| (4) | According to the SO, which was notified to Paramount on 27 July 2015, the clauses that prevent or limit Sky from making its retail pay-TV services available in response to unsolicited requests from consumers residing or located in the EEA but outside the United Kingdom and Ireland, on the one hand, and the clauses that require the Studios to prevent or limit broadcasters located within the EEA but outside the United Kingdom and Ireland from making their retail pay-TV services available in response to unsolicited requests from consumers residing or located in those territories, on the other hand, have as their object the restriction of competition and the Parties have not demonstrated that these clauses are exempted under Article 101(3) TFEU. |
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(4)

According to the SO, which was notified to Paramount on 27 July 2015, the clauses that prevent or limit Sky from making its retail pay-TV services available in response to unsolicited requests from consumers residing or located in the EEA but outside the United Kingdom and Ireland, on the one hand, and the clauses that require the Studios to prevent or limit broadcasters located within the EEA but outside the United Kingdom and Ireland from making their retail pay-TV services available in response to unsolicited requests from consumers residing or located in those territories, on the other hand, have as their object the restriction of competition and the Parties have not demonstrated that these clauses are exempted under Article 101(3) TFEU.

| (5) | All the Parties had the opportunity of access to the file by way of a DVD-ROM. Each Party either arranged for its DVD-ROM to be picked up directly from DG Competition's premises on 3 August 2015 or received it by courier on 5 August 2015. Following correspondence with Sony concerning its request for access to the information underlying the preliminary assessment in paragraph 267 of the SO, DG Competition provided each Party with the full text of footnote 132 of the SO. None of the Parties referred the matter to me. |
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(5)

All the Parties had the opportunity of access to the file by way of a DVD-ROM. Each Party either arranged for its DVD-ROM to be picked up directly from DG Competition's premises on 3 August 2015 or received it by courier on 5 August 2015. Following correspondence with Sony concerning its request for access to the information underlying the preliminary assessment in paragraph 267 of the SO, DG Competition provided each Party with the full text of footnote 132 of the SO. None of the Parties referred the matter to me.

| (6) | On 16 December 2015, following correspondence with Sky UK, Warner and Fox, DG Competition granted each Party access to non-confidential versions of parts of the written responses to the SO of the other Parties. |
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(6)

On 16 December 2015, following correspondence with Sky UK, Warner and Fox, DG Competition granted each Party access to non-confidential versions of parts of the written responses to the SO of the other Parties.

| (7) | Upon consideration of requests from Sky UK, Fox, Warner and NBCUniversal in particular, DG Competition granted the Parties access to non-confidential versions of the written observations of interested third persons (4). All Parties were given the possibility to present written comments on those observations. |
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(7)

Upon consideration of requests from Sky UK, Fox, Warner and NBCUniversal in particular, DG Competition granted the Parties access to non-confidential versions of the written observations of interested third persons (4). All Parties were given the possibility to present written comments on those observations.

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| (8) | Aside from Sky plc, all the SO Addressees responded in writing to the SO by the deadlines, or if applicable the extended deadlines, set by DG Competition. Sky plc did not respond to the SO. The SO Addressees that responded in writing to the SO requested in their written responses to be heard orally. |
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(8)

Aside from Sky plc, all the SO Addressees responded in writing to the SO by the deadlines, or if applicable the extended deadlines, set by DG Competition. Sky plc did not respond to the SO. The SO Addressees that responded in writing to the SO requested in their written responses to be heard orally.

| (9) | The oral hearing was held over 3 days, from 18 to 20 January 2016. All the SO Addressees, including Paramount, that had responded in writing to the SO participated. 11 interested third persons were invited in accordance with Article 6(2) of Decision 2011/695/EU to participate in the oral hearing. |
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(9)

The oral hearing was held over 3 days, from 18 to 20 January 2016. All the SO Addressees, including Paramount, that had responded in writing to the SO participated. 11 interested third persons were invited in accordance with Article 6(2) of Decision 2011/695/EU to participate in the oral hearing.

| (10) | On 15 April 2016, Paramount offered proposed commitments in accordance with Article 9(1) of Regulation (EC) No 1/2003 to meet the concerns expressed by the Commission. |
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(10)

On 15 April 2016, Paramount offered proposed commitments in accordance with Article 9(1) of Regulation (EC) No 1/2003 to meet the concerns expressed by the Commission.

| (11) | On 22 April 2016, the Commission published a notice in the Official Journal of the European Union pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the Commission's concerns and the proposed commitments submitted by Paramount on 15 April 2016. Responses were invited within one month of this publication. |
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(11)

On 22 April 2016, the Commission published a notice in the Official Journal of the European Union pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the Commission's concerns and the proposed commitments submitted by Paramount on 15 April 2016. Responses were invited within one month of this publication.

Official Journal of the European Union

| (12) | A total of 25 substantive responses were received. Certain respondents submitted that the proposed commitments failed to describe in a sufficiently detailed manner the nature of the clauses that Paramount proposes to commit to no longer enter into or be bound by. In particular, some of these respondents claimed that the proposed commitments were not self-reading, but required access to the text of the SO for their interpretation. |
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(12)

A total of 25 substantive responses were received. Certain respondents submitted that the proposed commitments failed to describe in a sufficiently detailed manner the nature of the clauses that Paramount proposes to commit to no longer enter into or be bound by. In particular, some of these respondents claimed that the proposed commitments were not self-reading, but required access to the text of the SO for their interpretation.

| (13) | On 27 May 2016, DG Competition informed Paramount of the result of the market test of Paramount's proposed commitments conducted pursuant to Article 27(4) of Regulation (EC) No 1/2003. |
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(13)

On 27 May 2016, DG Competition informed Paramount of the result of the market test of Paramount's proposed commitments conducted pursuant to Article 27(4) of Regulation (EC) No 1/2003.

| (14) | Paramount subsequently submitted modified proposed commitments that no longer cross-refer to the SO. DG Competition sent these to the respondents that had claimed that the initially proposed commitments were insufficiently clear, giving these respondents the opportunity to submit further observations. |
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(14)

Paramount subsequently submitted modified proposed commitments that no longer cross-refer to the SO. DG Competition sent these to the respondents that had claimed that the initially proposed commitments were insufficiently clear, giving these respondents the opportunity to submit further observations.

| (15) | In view of Paramount's modified proposed commitments, the Commission has come to the conclusion that there are no longer grounds for action against Paramount and that the proceedings against it should be brought to an end by way of a decision pursuant to Article 9 of Regulation (EC) No 1/2003. |
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(15)

In view of Paramount's modified proposed commitments, the Commission has come to the conclusion that there are no longer grounds for action against Paramount and that the proceedings against it should be brought to an end by way of a decision pursuant to Article 9 of Regulation (EC) No 1/2003.

| (16) | Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the Draft Decision deals only with objections in respect of which Paramount has been afforded the opportunity of making known its views. I conclude that it does. |
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(16)

Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the Draft Decision deals only with objections in respect of which Paramount has been afforded the opportunity of making known its views. I conclude that it does.

| (17) | Overall, I consider that the effective exercise of procedural rights has been respected. |
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(17)

Overall, I consider that the effective exercise of procedural rights has been respected.

Brussels, 14 July 2016.

Wouter WILS

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(1)  Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

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(2)  Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1) (‘Regulation (EC) No 1/2003’).

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(3)  Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, p. 18) (‘Regulation (EC) No 773/2004’).

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(4)  I have recognised 16 interested third persons in Case AT.40023: ANICA Associazione Nazionale Industrie Cinematografiche Audiovisive Multimediali; Association des Producteurs de Cinéma; BT Group plc; Bureau Européen des Unions de Consommateurs AISBL; Danish Producers' Association; Distribuidora de Televisión Digital, SA; EFADs — European Film Agency Directors Association (aisbl); European Producers Club; Groupe Canal+; Liga Nacional de Fútbol Profesional; Producers Alliance for Cinema and Television Limited; ProSiebenSat.1 Media SE; Spitzenorganisation der Filmwirtschaft e.V.; The British Film Institute; The Football Association Premier League Limited; and Zentropa.

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