French Competition Authority Restricts Canal Plus in Online TV, Movie Deals

By Sam Schechner

PARIS--France's Competition Authority gave the green light Monday to French pay-TV giant Canal Plus for two takeovers, but applied restrictions to the deals that are aimed at loosening the Vivendi SA (VIV.PA) subsidiary's grip on the French television marketplace.

In the first of the highly anticipated decisions, the authority re-authorized a 2006 approval that it had invalidated last year regarding a merger between Canal Plus's satellite distribution service, CanalSat, with rival TPS. It also approved a deal for Canal Plus to take over two free-to-air channels, Direct 8 and Direct Star, owned by French industrialist Vincent Bollore, in a deal first announced last year.

As part of the approval of the CanalSat-TPS deal, the competition authority applied injunctions to the company for a period of five years, including restrictions on the terms of movie licenses Canal Plus can buy for its channels, and a requirement that CanalSat carry a minimum of 55% channels that are independently owned. Canal Plus's premium channels must also be made available for third-party distributors, and the company cannot sign exclusive deals for its Netflix-like service CanalPlay Infinity.

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.

For the Bollore deal, the commission said it negotiated conditions with Canal Plus aimed at mitigating the "risks" of the added "leverage" the deal would give Canal Plus. Those conditions include a promise for negotiate deals for American TV shows and movies separately between the two free channels and Canal Plus's pay-TV channels.

Write to Sam Schechner at [e-mail]

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