The European Commission will examine whether competition between EU states to attract major US film productions is undermining state aid for European cinema, the EU's executive arm said Monday.
With 2.3 billion euros ($3.3 billion) spent through grants, soft loans and tax incentives for films every year, the commission opened a public consultation to review 10-year old rules on subsidies for the sector that expire at the end of the year.
A "subsidy race" to lure major films has continued even though the EU treaty aims to avoid this, the commission said.
"The only winners of such a race are the US majors, and the greatest losers the national film industries across Europe," the EU executive said.
Britain, France, Germany, Italy and Spain offer the majority of the financial support offered to filmmakers, according to the commission.
EU competition commissioner Joaquin Almunia said he wanted to gather views about the objectives of state aid to films before designing new rules.
"For example, does a subsidy race to attract major US productions undermine the effectiveness of aid to support smaller European films? Does the scope of our rules need to go beyond encouraging the production of more films," he said.
"And is support needed to encourage filmmakers to explore the possibilities of the digital revolution? Only when we have a clearer picture of issues like these can we begin to develop appropriate state aid rules," Almunia added.
The commission said it aimed to write new rules in the second half of 2012.