Hollywood majors fined for running 'monopoly'
11 May 2006, MADRID — Spain's Competition Court fined five Hollywood film distribution companies a total of EUR 13 million for "monopolistic" practices.
11 May 2006
MADRID — Spain's Competition Court fined five Hollywood film distribution companies a total of EUR 13 million for "monopolistic" practices.
The court ruled the companies' Spanish affiliates broke competition laws and harmed the interests of Spanish cinemagoers.
The ruling was against Walt Disney Company Iberia/Buenavista International Spain, Sony Pictures Releasing España, Hispano Filmfox, United International Pictures and Warner Sogefilms.
The court also fined the Federation of Spanish Cinema Distributors (Fedecine) EUR 900,000 which includes all the five majors.
The court said they had broken article 1 of Spain's Competition Law.
It ruled: "These distributors concentrated their commercial resources against the cinema companies."
The Hollywood majors flexed their commercial muscle to fix prices for distributors, the length of time films are shown, which cinema could be allowed to show the latest blockbuster and even the trailers before the films, the court heard.
The court said these majors could not dictate the conditions under which cinema companies showed films because "this could be detrimental not just for cinema companies but the consumer".
The case came to court after a long campaign by independent Spanish cinema companies and distributors who claimed the Hollywood majors formed a cartel.
The Federation of Spanish Cinema Companies (FECE) claimed prices to see films in Spain were 15 percent above the European average because they were fixed by the cartel.
A spokesman for FECE said: "This is historic. It the first time, not only in Spain or Europe but in the world these majors have been fined for monopolistic practices."
Pedro Pérez, president of the Federation of Spanish Audiovisual Producers, said he was "delighted" with the ruling.
"At last someone has defined the rules of the market. The most important thing is the benefit of cinemagoers as well as companies."
The ruling comes as Spanish cinema audiences have been falling in recent years, victims of the growing popularity of DVDs.
Last year, the number of people who went to see a film in Spain fell 12.5 per cent compared with 2004.
The five Hollywood majors can appeal against the ruling in a higher court.
[Copyright EFE with Expatica]
Subject: Spanish news