In an unprecedented decision, on September 20, 2011, the French
Competition Authority (Autorité de la concurrence) withdrew
the authorization granted in 2006 for Canal Plus to merge with TPS,
on the ground that Canal Plus Group subsequently breached some of
the conditions of the merger authorization. Furthermore, the
Authority imposed a € 30 million fine (about $40 million)
on Canal Plus and ordered it either to dismantle the merger or
notify it afresh. Never before in France has a merger authorization
decision been withdrawn in such circumstances. Even in the few
cases where a breach of commitments has been sanctioned in the
past, the fines imposed have been very modest in comparison.
In 2006, Canal Plus and Vivendi Universal acquired TPS and
CanalSatellite and created the company Canal Plus France, which
according to the French government thereby acquired a dominant
position on the French market for the distribution of pay TV. To
alleviate the competition concerns expressed by the French Ministry
of Economy, then in charge of merger control, Canal Plus offered
fifty-nine commitments. In particular, Canal Plus committed to make
the seven most attractive pay channels available to competing
distributors and to maintain the quality of those channels, in
order to stimulate competition on the market.
According to the Competition Authority, Canal Plus failed to comply
with ten of those commitments, in particular the two mentioned
above: the attractive channels were subsequently unbundled, and the
quality of those channels was allowed to deteriorate over time,
thereby depriving competing distributors of a chance effectively to
compete with Canal Plus. As a result, the Competition Authority
concluded, Canal Plus maintained its dominant position on the
French market for distribution of pay TV channels.
In such circumstances, French law (Art. L.430-8 of the French
Commercial Code) authorizes the Competition Authority to either
order Canal Plus to comply with its commitments or withdraw the
decision authorizing the merger. In the past, the Ministry of
Economy always opted for an injunction in such circumstances. In
this case however, the Authority chose to withdraw the decision,
because (i) an injunction requiring compliance would not have
remedied the past breaches of the commitments and (ii) the breaches
were particularly serious and essential to the 2006 authorization.
The Competition Authority emphasized that it found "repeated
unwillingness and lack of diligence" from Canal Plus, a very
experienced operator on the market. Vivendi Universal was not
sanctioned because it had played no role in the breach of the
Following this unprecedented decision, the merger is now to be
either dismantled or, more likely, notified afresh to the
Competition Authority. Companies now are warned that a merger
authorization with commitments does not give blanket immunity and
the Authority will watch over the implementation of each individual
commitment. Dismantling a merger can no longer be seen as a
theoretical threat but must be treated as a tangible risk.
By 27 December 2016, the Croatian Parliament needs to implement the Directive 2014/104/EU on antitrust damages actions, which is expected to streamline the procedure for private individuals and businesses to sue for damages...
The EU's one-stop shop principle for concentrations faces an uncertain future following for the UK's Brexit decision. Several scenarios could play out...
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).