Films and European Competition Law

Abstract

In 1948 the United States Supreme Court gave judgment in U.S. v. Paramount Pictures1 in which it held that the vertical integration of the three branches of the American film industry (production, distribution and exhibition) violated the antitrust laws. Neither the main trade association, the MPAA, nor the association formed to promote and protect film exports, the MPEA, was affected by this. In Europe there has been no such important judicial ruling, and the investigations into monopoly conditions in the U.K. film industry (the Palache report2 in 1944 and the Monopolies Commission report3 in 1966), while particularly concerned with and critical of the distribution and exhibition patterns, were not followed up by legislation. European Community competition has not yet been applied to the film industry as such, although it has been quite close to it in some instances. A discussion of and European competition law is bound, therefore, to be speculative rather than descriptive. The following remarks will, in any case, apply primarily to EEC competition rather than to the individual cartel laws of the western European countries, although it is recognized that at least two non-EEC states-Sweden and Spain-are important producers of films and cannot be ignored in any plans for a European film policy. The point of departure has been primarily that the development of a strong and cohesive European film policy necessarily involves a tendency toward concentration which is bound to be affected by the EEC rules intended precisely to inhibit such concentration. There is, in fact, an inherent opposition of interests, which has been pointed out in an American context very persuasively by David Gordon,4 between the need for cartelization, in order to create a strong self-reliant and self-confident film industry, and the more general economic philosophy adopted by the U.S. antitrust and, less rigidly, by EEC competition law, that combinations for purposes