Gaul’s antitrust board has suspended its approval of Canal Plus Group’s 2006 merger with pay TV operator TPS and fined Canal Plus €30 million ($41 million) for breaching its commitments.

The antitrust board claims that Canal Plus Group has degraded the quality of TPS channels by withholding rights to recent American films and sports.

The deal allowed Canal Plus Group to merge its satellite platform, CanalSat, with its former pay TV rival, TPS. But the antitrust board, which was wary of the merger, asked Canal Plus Group to fulfil 59 requirements by 2012. It is now arguing the paybox failed to meet 10 of them, including withholding quality content. As a result, subscriptions dropped 33.7% between December 2005 and August 2010.

It is therefore asking Canal Plus Group to file a new merger proposal in a month — the first time this has happened in France. Canal Plus Group said Wednesday that it would appeal the decision, which it called “highly unusual and disproportionate.”

The pay TV company pointed out that “the conditions of competition prevailing in 2006 have completely changed, and the competition authority’s decision fails to take into account the arrival of global Internet companies and telecom operators.”

The company also claimed the antitrust board had made the decision to “force Canal Plus to enter into new commitments, which would extend beyond those imposed under the authorization given in 2006.”

However, the pay TV giant said it was willing to engage in new discussions with the antitrust authorities.