WRITTEN QUESTION E-1270/01

by Salvador Garriga Polledo (PPE-DE) to the Commission

(2 May 2001)

Subject: Sale of films in packages (block booking)

The vast majority of those working in the European cinema industry are opposed to the sale of films in packages as practised by some distributors despite this being both illegal and condemned by professionals in the industry.

A number of European competition courts have already condemned the practice of block booking since attempting to sell something you possess and forcing the purchase of set packages are not one and the same thing.

Can the Commission say in what way the EU can protect itself at Community level against the illegal practices of some cinematographic distributors whereby they force the sale of films in packages, what Community provisions there are to protect professionals working in the cinema industry against such abusive practices and what it would propose to do against this tendency to engage in abusive practises displayed by some Community cinematographic distributors?

Answer given by Mr Monti on behalf of the Commission

(20 June 2001)

The Honourable Member asks the Commission how the Community may prevent alleged abusive block booking practices by cinematographic distributors. The Honourable Member also asks what mechanisms do professionals from the cinema industry have at their disposal in order to challenge such practices.

The Commission understands the question as referring to the tying of the acquisition of the right to publicly exhibit a certain film for a certain period to the obligation of acquiring the right to exhibit an additional set of films. The Commission can inform the Honourable Member that it has been confronted in the past with allegations concerning this type of practices but no evidence has ever been produced so as to justify the Commission pursuing a case in this domain.

From a Community competition law perspective, the practice consisting in tying the sale of one product to another may be considered in certain circumstances as an infringement of the competition rules enshrined in Articles 81 and 82 (ex Articles 85 and 86) of the EC Treaty.

Article 81, paragraph 1(e), of the EC Treaty prohibits all agreements and concerted practices between undertakings which may affect trade between Member States and which have as their object or effect the restriction of competition, and in particular those which make the conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Article 82 (d) of the EC Treaty prohibits any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it insofar as it may affect trade between Member States, where such abuse consists in making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Pursuant to Article 9, paragraph 2, of Council Regulation No 17(1), the Commission has the power to apply Article 81, paragraph 1, and Article 82 of the EC Treaty. The Commission should underline that, pursuant to Article 9, paragraph 3, of Regulation 17, the authorities of the Member States remain competent to apply the EC Treaty provisions as long as the Commission has not initiated any procedure.

The Commission may exercise its powers either upon its own initiative or upon application of third parties. Those entitled to make application are Member States and natural or legal persons who claim a legitimate interest.

Therefore, if the professionals from the cinema industry the Honourable Member refers to in his question are able to produce any evidence on the alleged practices by cinematographic distributors which they consider to be abusive, the Commission would urge them to complain to the national competition authorities or to the Commission. Provided that the requirements of Articles 81 or 82 are fulfilled, the national authorities or the Commission will act so as to bring the infringements to the Community competition rules to an end.

(1) Council Regulation No 17, First Regulation implementing articles 85 [now 81] and 86 [now 82] of the Treaty (OJ 13, 21.2.1962).