Europe's highest court delivered a blow to companies that retransmit free-to-air television programming over the Internet on Thursday, ruling that original broadcasters have the right to prohibit any such redistribution.
The case involves a British-based company, TVCatchup Ltd, which offers "live" streaming of free-to-air television shows, including programming by the BBC, ITV (ITV.L) and Channel 4, the three largest terrestrial broadcasters in Britain, and Sky (BSY.L).
TVCatchup is accessible only to subscribers who have a valid British TV licence and are located in the United Kingdom - the very same audience that could potentially watch the programmes for free on terrestrial TV if they wanted.
But the European Court of Justice ruled against TVCatchup, saying that under a 2001 EU law, original broadcasters are held to be "authors" who have an exclusive right to authorise or prohibit any communication of their work to the public.
The ruling will be a boost to ITV, which brought the case, and to other domestic broadcasters whose potential audience is effectively being rerouted to a revenue-generating website. TVCatchup streams commercials before its programming.
"EU law seeks to establish a high level of protection for authors of works, allowing them to obtain an appropriate reward for the use of those works," the court said in a statement.
"Television broadcasters may prohibit the retransmission of their programmes by another company via the Internet," it said.
"That retransmission constitutes, under certain conditions, a 'communication to the public' of works which must be authorised by their authors."
The court's ruling was based on two lines of argument, first that TVCatchup is involved in communicating content, and secondly that it is reaching a broad public.
Because the website delivers programmes using a "specific technical means different from that of the original communication", the court said the transmission was a communication requiring approval from the original authors.
And because TVCatchup and similar services make their programmes available to anyone in Britain with a TV licence, "the retransmission is aimed at an indeterminate number of potential recipients and implies a large number of people".
As a result, the court said the Internet broadcaster was not adhering to the letter of the 2001 law, which deals with the harmonisation of copyright in the European Union.
"The court accordingly finds that, when a given work is put to multiple use, each transmission or retransmission of that work using a specific technical means must, as a rule, be individually authorised by its author."