This little German film by first-time director Florian Henckel von Donnersmarck has won an Oscar for the Best Foreign-Language Film. It was an upset victory – the clear favourite was Guillermo del Toro’s internationally-acclaimed ''Pan’s Labyrinth'', a sublime fantasy that won rave reviews, and has grossed well over 35 millions in the US alone. (By contrast, and despite its Oscar, ''The Lives of Others'' has barely reached 1.3 million in the US so far). So why did the Academy voters chose an obscure, star-less German film about Stasi agents in 1984’s East Berlin over a brilliant and flamboyant political fantasy starring Maribel Verdu and Ariadna Gil ? Certainly not for purely stylistic reasons. While well-directed and acted, ''The Lives of Others'' is a fairly modest picture, almost ascetic in its formal restraint and visual modesty. It’s cold, measured and unpretentious. ''Pan’s Labyrinth'' drives circles around it in terms of cinematographic brilliance and visual invention. If a reason is to be found, it’s probably in the treatment of political themes. The two films are polar opposites as far as ideology is concerned. ''Pan’s Labyrinth'' is an anti-fascist diatribe set in 1946 Spain, with Franco’s soldiers as villains and Communist resistance fighters as heroes. In ''The Lives of Others'', the Communists are the villains and the film shows a society that Spain might have become if Franco had lost the Civil War. However, the way the politics are treated in each film is quite different. ''Pan’s Labyrinth'' offers kitschy, cartoonish, exaggerated caricatures of fascist villains, without any psychological depth whatsoever. In ''The Lives of Others'', by contrast, the Communist villains are three-dimensional, complex individuals with complicated psychological motivations and surprising character development arcs. In this film, it’s the system itself that’s on trial, not the people who serve it.