French Authorities Withdraw Approval for CanalSat/TPS Merger

PARIS: Canal+ Group has been slapped with a 30 million euros fine by the Autorités de la Concurrence regulator over its takeover of TPS, with the French competition authority now withdrawing its approval for the 2006 merger.

The regulator argues that Canal+ did not comply with several commitments it made to receive approval for the CanalSat and TPS merger. The company must either undo the merger or begin the approval process over, the Authorité says. The breaches of the commitments were the result of "negligence…and a repeated lack of diligence," as well as "ill will from Canal+".

Canal+ and Vivendi made a total of 59 commitments, the Authorité said, to mitigate the anti-competitive effects of a merger between two dominant platforms. The regulator says that ten commitments have been breached. These include relations between Canal Plus Group and independent TV channels, rights’ acquisition and, most notably, third-party access to a bouquet of channels. The Authorité says that Canal+ was late in offering access to the channels to other platforms and degraded the quality of those channels.

In a statement, Canal+ says the "decision appears highly unusual and disproportionate given the alleged breaches identified, and that it intends to "pursue all appropriate actions against this decision. It is naturally not conceivable to call into question a merger five years after it was completed. The Competition Authority clearly sees this decision as a mean to force Canal+ Group to enter into new commitments, which would extend beyond those imposed under the authorization given in 2006. However, CANAL+ Group welcomes the opportunity given to it to open new discussions with the Autorités de la Concurrence as part of the new notification it has been requested to file. The conditions of competition prevailing in 2006 have completely changed and the Autorités de la Concurrence’s decision fails to account for the disruption caused to the TV market by the arrival of global Internet companies and telcom operators."