Fine time for H’w’d

Studios hit with price-fixing penalties

In the biggest faceoff in recent years between Hollywood and Spanish institutions, Spain’s antitrust authorities have slammed a E12 million ($15.3 million) fine on the branches of Hollywood’s major studios in Spain for cartel price-fixing and the anticompetitive coordination of other commercial policies.

The country’s Fedicine lobby, made up of both U.S. majors and Spanish indies, also faces a $1.1 million penalty for anticompetitive use of restricted information.

Studio-owned distributors facing the fine are Walt Disney Co. Iberia, Columbia TriStar Films de Espana, Hispano Foxfilm, United Intl. Pictures and Warner Sogefilms/Warner Sogebros, joint ventures of Warner Bros. and Spanish pay TV operator Sogecable. Fines are $3.1 million per company.

Some sort of decision from Spain’s Competition Defense Tribune has been hanging over the majors in Spain since 2003, when exhibitors lobby FECE lodged a complaint.

The allegation of cartel price-fixing is based on the Tribune’s study of the studios’ commercial practices with regard to their biggest releases in 2002.

“Although no legal limitation or rulings exist over a maximum percentage that can be charged, during 2002, all the accused companies charged 60% for the first week on their most commercial films,” the Tribune’s 24-page resolution asserted.

The Tribune also charged the studios with using a joint database to coordinate their big bows in Spain, avoiding face-to-face competition on the same weekends, which could benefit exhibs.

“We’re consulting with lawyers,” said Hispano Foxfilms managing director Miguel Lustau, who declined to confirm whether the U.S. studio branches in Spain will appeal.

Feeling among local exhibs is that the Tribune has merely fired a warning shot across the bows of the studio ops.

“The Tribune accuses the distributors of grave malpractice. The fine hardly recognizes this,” said FECE general manager Rafael Alvero.

While the studios could appeal, their case has already been heard in Tribune hearings over three years. So they may have to buckle under, rejigging distributors’ cuts on pics according to the commercial potential of films and ramping up more competition with regard to release dates.

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