France

[FR] Appeal Court rejects TF1's demand to declare the acquisition of NETHOLD BV by CANAL PLUS illegal

IRIS 1997-2:1/11

Ad van Loon

European Audiovisual Observatory

On 29 January 1997, the Paris Appeal Court ( Cour d'appel de Paris) rendered judgement in a case involving the French private broadcasters TF1 and Canal Plus.

Canal Plus is in the process of taking over NETHOLD BV. NETHOLD BV exploits a number of thematic television channels. Amongst those are a number of channels which are totally dedicated to sports events: Supersport Belgium, Supersport The Netherlands, Nordic Supersport (for Denmark, Finland, Norway and Sweden) and Télépiù 2. TF1, on the one hand, is involved in the EUROSPORT consortium, which operates a transnational sports channel by the name of EUROSPORT. Canal Plus, on the other hand, participates in a competitive sports channel, called SCREENSPORT.

In 1993 TF1, Canal Plus and other interested parties agreed that their sports channels would no longer compete, but that they would make a joint effort to develop the EUROSPORT channel. The agreement prohibits the parties, inter alia, to acquire an interest in any competitive television service which fills more than 75% of its broadcasting time with sports programmes.

In the present case, TF1 felt that the attempts by Canal Plus to acquire NETHOLD BV was a breach of this non-competition agreement. Canal Plus reacted by stating, inter alia, that the intention behind the non-competition clause was to facilitate the collaboration between SCREENSPORT and EUROSPORT with the sole objective of protecting EUROSPORT. According to Canal Plus, it was not the intention to avoid competition with TF1. The interpretation given to the non-competition clause by TF1 would be contrary to EC competition law, notably Article 85 of the EC Treaty (prohibition of cartel agreements and concerted practices).

TF1 of its part, reckoned that the European Commission had agreed to exempt the non-competition clause from the application of Article 85 EC. This was confirmed by the Court of Appeal. Although the European Commission did not yet adopt a formal decision in the matter, it had clearly indicated on several occasions, that it intended to do so. Furthermore, the Court came to the conclusion that Canal Plus did act in breach of the clear and precise terms of the non-competition agreement. TF1 demanded that the Court of Appeal would immediately suspend all operations which had been undertaken in relation to the acquisition of NETHOLD BV by Canal Plus.

The Court, however, realised the severe consequences for NETHOLD BV and its shareholders (who are not a party in the conflict that opposes Canal Plus and TF1) if it would decide to declare all transactions that had taken place in relation to the acquisition of NETHOLD BV by Canal Plus illegal. The objective of such a decision would be to make Canal Plus respect its obligations vis à vis TF1, an objective which the Court deemed not to be proportionate to the consequences that would result from such a decision. Therefore, the Court rejected the measures demanded by TF1.