The French Tribunal de grande instance de Paris has sentenced Vivendi’s Canal+ to pay €38 million to its competitor Parabole Réunion, failing to comply with its obligations after Canal+ acquired its French competitor TPS.
Parabole Réunion operates a satellte DTH service in Reunion, Mauritius and Madagascar, which was launched in 1999. The platform obtained the exclusive distribution rights of eight premium TPS channels, and was competing with Canal’s African DTH service.
In 2006, Canal+ acquired TPS and closed down the premium channels, which were delivered to Parabole Réunion. By contract, Canal had to provide other channels with “equivalent attractiveness”. Until the end of 2012, Canal+ was forced to develop channels only for its small competitor from Reunion. But in practice, it has provided channels on the cheap, less attractive than the old TPS channels. “This strategy was aimed at destroying Parabole,” according to Parabole.
To complicate matters, Canal+ said in 2008 it inteded to acquire its competitor, but failed to do so after one of its local shareholders blocked the acquisition. The deal would have put an end to the many disputes between the two rivals.
On September 20, 2011 the Autorité de la concurrence withdrew the green light for the acquisition of TPS by Canal Plus due to non-compliance with commitments made, particularly with respect to Parabole. The watchdog ruled that Canal had not respected its obligation, and forced the company to pay Parabola compensation, after a long legal battle. However, the difficulty was to establish the amount of the damage, and therefore the amount to be paid.
On July 23, 2012 the Competition Authority gives a new green light for the purchase of TPS, and imposed new obligations, which would lead to the conclusion of a new contract with Parabole. Parabole asked Canal to correct the copy of the Authority (power of evocation), but to no avail.
The tribunal de grande instance of Paris commissioned a report to an expert, Gabriel Grosjean. It noted that Parabole’s market share had fallen from 37% to 26% between 2006 and 2012 (including Réunion, Mauritius and Madagascar). And in total, Parabola had lost or 40,000 subscribers to its rival.
Meanwhile, Parabole said it appealed this decision, judging the damage too low compared to the EUR145 million the company claimed. Parabole estimates that the value of the company fell from €190 million to €44 million because of Canal’s actions.
