Gallic anti-trust watchdog imposes tough conditions

PARIS

French anti-trust authorities have greenlit pay TV giant Canal Plus’ acquisition of a controlling share in Bollore’s DTT nets, Direct 8 and Direct Star, Canal Plus’ first free-to-air channels.

But the Vivendi-owned paybox isn’t getting a free pass: Canal Plus must fulfill anti-trust authority demands aimed at limiting its control over the free-to-air market and preventing it from bundling acquisition rights for content for its pay TV, free-to-air channels and VOD platform.

Canal Plus, which has pay TV output deals with the six U.S. majors, will only be allowed to sign one output deal with a U.S. major for its free-to-air webs. And the paybox won’t be permitted to bundle pay TV and free-to-air rights on more than 20 French films, with a restriction on the number of big-budget movies.

Guidelines are set for five years and can be renewed.

The anti-trust board claims these rules will stop Canal Plus from squeezing other free-to-air players (essentially commercial nets TF1 and M6) out of negotiations as well as using its leverage to monopolize premium content. In France, free-to-air and pay TV channels have to invest a percentage of their revenues on acquiring local content.

A major backer of Gallic cinema, Canal Plus dominates the pay TV market thanks to its close ties with the French film industry.

It has been on the antitrust board’s radar since unveiling plans to launch a free DTT channel, Canal 20. While those plans were scrapped, the group announced it was taking a controlling share in Direct 8 and Direct Star last September.

In a separate decision concerning Canal Plus Group’s 2006 merger with former rival pay TV group TPS, the anti-trust board has issued a series of injunctions, which Canal Plus is appealing.

Key injunctions ban Canal Plus from signing output deals with French distribution companies and forbid it from holding exclusive VOD rights on third-party content. Canal Plus was also ordered to surrender its 33.3% stake in telco giant Orange Cinema Series. Inked in June 2011, deal gave Canal Plus access to its former competitor Orange’s distribution channels in France.

Canal Plus said Tuesday it had filed a petition to the State Council to suspend the injunctions. If the State Council refuses, the anti-trust board can fine Canal Plus up to 5% of its annual revenues if the group fails to execute the orders.

The company was fined €30 million ($36.4 million) in September for breaching its commitments and degrading the quality of TPS channels.

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