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Friday, October 07, 2011
 
The "Karen Murphy Case" - European Soccer, Television Broadcasts, Competition Law, and Decoder Cards

Below is a guest post by Tassos Kaburakis.

On October 4, 2011, the European Court of Justice (ECJ) delivered an important decision in a consolidated case dealing with broadcasting rights, competition, and European Union (EU)-wide intellectual property issues [Football Association Premier League and Others (C-403/08 and C-429/08)… a.k.a. the Karen Murphy case].
Several pub owners in the United Kingdom (UK) have been circumventing the exclusive license, which the Football Association Premier League (FAPL) has signed with BSkyB and ESPN (£1.78 billion for the rights to broadcast Premiership matches in the UK from 2010 to 2013). A Sky subscription that would allow public viewing of FAPL games would cost approximately £700*. The pub owners (including Karen Murphy) opted not to pay the high fees and instead purchased foreign satellite decoder cards and individual subscription cards from Greece, for a fraction (10%) of the Sky subscription cost.

Regardless of the fact UK pub owners utilized these foreign decoding devices in unauthorized fashion, breaching terms of use by submitting false residence addresses, the ECJ focused on European consumers’ preemption from freely engaging in the purchase of goods and services across state borders, thus declaring that restrictions on the territorial range within which one would have to use a certain subscription service were in violation of EU Law. Namely, any exclusive licenses, as well as national legislation protecting such licenses, are found in violation of the freedom to provide services and fair competition rules, if they create artificial trade barriers, fix prices by creating national borders EU Law abolishes, and prevent consumers from using a service beyond certain national borders. The EU Satellite Broadcasting Directive and the Television without Frontiers Directive in particular declare that broadcasts across state borders and a common market distribution are key avenues toward the realization of European integration.

Importantly, the ECJ found no justifications on grounds of public policy for such restrictive practices. On one hand, the Court found no intellectual property rights by means of EU-wide Copyright for football matches themselves (albeit still protectable under member state law), rather only found particular aspects of the broadcasts copyrightable, e.g. the FAPL anthem, highlights, and various graphics. For such protectable aspects of a broadcast, one still needs to seek permission from the rights’ owner prior to public viewing. On the other hand, such restrictive practices were not justified either on grounds of protecting sporting interests, such as attracting game attendance, as other means (i.e. “closed periods” during which contracting parties would not broadcast Premiership games to encourage attendance) may accomplish such goals in less restrictive fashion than complete preemption of cross-border services’ utilization.

The Court’s use of the “specificity of sport” Art. 165 of the Treaty establishing the Functioning of the European Union (TFEU) is significant. Practices in favor of sport organizations should not go beyond what is necessary to accomplish the goals pursued, and in any event the Court assumes a position where the balance generally should lean in favor of upholding fundamental EU Law principles.





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