France’s Competition Authority Approves Canal Plus Takeovers with Restrictions

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Canal Plus accepted the conditions for a merger with Bollore group for free-to-air channels Direct 8 and Direct Star, but will contest the injunctions imposed on its 2006 union with TPS.

France's Competition Authority gave the green light for two major mergers to Canal Plus, but punished the Gallic pay TV giant with a series of several injunctions on Monday.

The Authority said “oui” to the group’s takeover of Bollore free-to-air channels Direct 8 and Direct Star and approved a 2006 merger with TPS, but imposed several punitive injunctions on the pay TV operator.

The restrictions are aimed to lessen the group’s monopoly over the country’s national TV landscape and give other networks the chance to establish competition on the marketplace.

Competition authorities accused Canal Plus of failing to fulfill the obligations imposed when it merged CanalSat with rival group TPS in 2006. The competition authority re-authorized the merger, but imposed strict sanctions for a period of five years.

55 percent of CanalSat’s channels must independently owned, Canal Plus's premium channels must also be available for third-party distributors and the company was banned from signing exclusive deals for its CanalPlay Infinity service.

Canal Plus has also been ordered to sell its stake in France Telecom’s Orange Cinema Series channels or take measures to restrict its influence on the channels. Canal Plus was asked to cede its participation in Orange Cinema Series so that the latter “can exercise effective competitive pressure, independent of the Canal Plus group” the competition authority said.

Canal Plus can only buy simultaneous pay and free-to-air rights to films or original series from one of the six Hollywood majors in order to prevent it from having exclusive control over all popular U.S. TV series. Canal Plus must also broadcast sporting events it acquires for its pay packages on the free-to-air channels in some form.

Canal Plus has the official OK to take over Direct 8 and Direct Star that they plan to give a full media makeover. The decision is a major one in Gaul since it marks the pay TV group’s first foray into free-to-air TV which will certainly change France’s media landscape.

In a statement released on Monday, Canal Plus expressed their joy over “this new step taken towards the concretization of this project.” Canal Plus will official take over pending CSA intervention in September.

Canal Plus has spent the past weeks announcing major changes for the networks including high profile TV hosts including plans for former TF1 news personality Laurence Ferrari to move to the increasingly popular free-to-air channel.

However, Canal Plus has been forced to accept strict conditions for the takeover. Other injunctions focused on film rights, distribution of the network’s thematic channels and VOD.

Canal Plus has accepted the conditions for the Bollore merger, but has rejected the injunctions on the TPS merger. Just after the decision was made, Canal Plus has already sent out a statement contesting the injunctions. Canal Plus said in a statement that it "disagrees with the analysis taken by the authority, as well as with the injunctions it has applied, adding that it will "without delay" seek to overturn the decision.

“The Canal Plus group disagrees with the analysis conducted by the Authority and the injunctions that it has applied,” the group declared, adding that they plan to ask “without delay” for a “suspension and revocation” of the rulings.

The competition authority’s president Bruno Lasserre told French press on Monday that the Canal Plus – Orange Cinema Series deal “restricts competition because it made Orange an ally of Canal Plus” and said that “We want Orange to take back its independence.”

Added Lasserre: “We could have struck a deal instead of delivering these injunctions, but our exchanges have been weak and ineffective.”

Canal Plus said that the group did not agree with the decision and plan to contest it. Canal Plus’ protest “shows that the measures are necessary,” Lasserre said.