BRUSSELS, Oct 26 (AFP) - EU competition watchdog Mario Monti said Tuesday he had dropped the probe into six of the eight Hollywood studios deemed to be using anti-competitive clauses in their contracts with European pay-TV firms.
The European Commission has settled with Warner Brothers, Buena Vista, 20th Century Fox, Sony Pictures, MGM and Dreamworks after they withdrew the clauses from their contracts.
"I am happy to announce that the commission has been able to close the investigation regarding six of the major studios," said Monti. The commission is continuing to investigate NBC Universal and Paramount Pictures Corp.
The clauses, known as the most-favoured nation clause, entitle the studio to the most favourable terms agreed by one of the pay-TV companies and any one of the studios.
This means that there is an alignment of the prices paid to the majors as any increase agreed with any one major will trigger parallel increases in the prices paid to other studios.
"The commission considers that under these circumstances of cumulative effect such anomalous way of setting prices is at odds with the basic principle of price competition," it said.
Neither NBC or Paramount have agreed to drop the clauses from their contracts.
Asked if these two studios could be prepared to follow in the footsteps of the other six, Monti said: "I am confident that they will reflect on their position especially after today's announcement."
Pay-TV companies sign so-called output deals with the majors. Studios agree to sell to broadcasters their entire film production for a given number of years.
10/26/2004 18:37 GMT - AFP