Canal +’s strategy framed by the French Competition Authority
The control of the media chronology by the Canal + group which, from the production and distribution of pay channels, is also positioned on unencrypted channels and unlimited video on demand, proves more difficult than expected. Without questioning the industrial model of the first French audiovisual group, the Autorité de la concurrence has strictly regulated the possibilities of the Canal + group by authorizing under conditions the CanalSat-TPS merger, suspended until then, as well as the purchase of Direct 8 and Direct Star channels. It is thus trying to encourage the emergence of competitors in the pay-TV market, in particular for the cinema offering.
By announcing, as of March 25, 2011, wanting to use its compensatory channel on DTT to launch a free-to-air channel, the Canal + group has redrawn the equilibrium of the French audiovisual landscape, leading the government to eliminate, as of October 11, 2011, the allocation of compensating channels. But the announcement of the acquisition of the Direct 8 and Direct Star channels at the Bolloré group in September 2011 undoubtedly confirmed the Canal + group’s desire to position itself on plain-line television in order to control, over time, the entire chronology of media, from film production and audio-visual series with Studio Canal to subscription video services with Canal Play Infinity (see REMNo. 21, p.79). Except that the ambitions of the Canal + group in the French audiovisual market were quickly thwarted by the Competition Authority. On the pay-TV market, where the group has agreed, on July 15, 2011, with its only real competitor, Orange, to take a 33.3% stake in the Orange Cinéma Séries network of cinema channels, the In a decision rendered on September 21, 2011, the competition removed from the Canal + group the authorization given in 2006 to merge with TPS. As for the free television market, the acquisition of Direct 8 and Direct Star channels has been authorized, but at the cost of significant concessions from the Canal + group.
By deciding to withdraw from the Canal + group the authorization to merge the CanalSat and TPS bundles, the Autorité de la concurrence chose an exceptional measure, with a fine of 30 million euros. In particular, it criticized the Canal + group for not having complied with 10 of the 59 commitments made at the time of the merger, in particular for having delayed making competing offers available to certain unbundled channels and for having decided not to develop TPS Star, which alone premium channel that can be an alternative to the Canal + channel. The Canal + group has therefore had to submit the TPS buy-back again to the Competition Authority, but this time by finding itself in a much more delicate position than in 2006,
The Canal + group has criticized the French Competition Authority for launching the investigation, withdrawing the authorization and taking a penalty by appealing to the same people, which undermines the impartiality of the decisions. and the sanction to be taken by separate persons. Finally, the Canal + group has denounced an infringement of the freedom to undertake in the event that an authorization is withdrawn several years after being granted. In this case, in fact, the return to the previous situation is impossible, TPS having been integrated in the group Canal +, forcing the purchaser to seek a new authorization in market conditions having changed profoundly.
The public rapporteur to the Council of State invalidated the first request, recalling that the sanction and the investigation were treated separately by the Competition Authority, even if the Constitutional Council remains in the matter only competent to decide. On the other hand, it considered as ” new and serious ” the question of constitutionality related to the cancellation of the repurchase, asking therefore, on July 17, 2012, its examination by the Constitutional Council, which will have to decide.
While waiting for the latter to decide, the Competition Authority and the Canal + group will have sought an agreement to obtain a new authorization for the operation. But the commitments proposed by the Canal + group have never satisfied the Autorité de la concurrence, which has been confronted with an outbidding of other actors in the French audiovisual sector. Thus, in May 2012, the French Competition Authority published its “market test” with, among other things, the recommendations of the other market players that it questioned. Among the measures envisaged, the Higher Audiovisual Council (CSA) and the competitors of Canal + have advocated a functional separation between publishing and channel distribution, or even a structural separation leading to the resale of CanalSat.
By advocating a functional separation between publishing and distribution, that is to say two entities with no links between them within the same group, the CSA has undoubtedly wanted to put pressure on the Canal + group whose industrial model is based precisely on the integration of both activities.