40
Annual Report -
2013
-
Vivendi
Group Profile | Businesses |
Litigation
| Risk Factors
1
Disputes with Independent Distributors
SFR, like other companies that use an indirect distribution model, faces
complaints by its distributors and, almost systematically, by its former
distributors. These recurring disputes concern the abrupt termination of
the contractual relationship, the abuse of economic dependence and/
or requests for reclassification of a distributor as a commercial agent,
and, more recently, applications for reclassification of a manager as a
branch manager and reclassification of the employment contracts of the
employees working at these points of sale as employment contracts
with SFR. The French Court of Cassation rendered three judgments
against SFR on the status of branch managers but the various Courts of
Appeal have decided in favor of SFR. On the issue of abrupt termination
of contractual relationships and the request for reclassification of
employees of the distributor as employees of SFR, apart from a few rare
exceptions the various courts have ruled in favor of SFR.
Parabole Réunion
In July 2007, the Group Parabole Réunion filed a legal action before the
Paris Tribunal of First Instance following the termination of its rights
to exclusively distribute the TPS channels in Reunion Island, Mayotte,
Madagascar and Mauritius. Pursuant to a decision dated September 18,
2007, Canal+ Group was prohibited, under fine, from allowing the
broadcast by third parties of these channels or those replacement
channels that have substituted these channels. Canal+ Group appealed
this decision. In a ruling dated June 19, 2008, the Paris Court of Appeal
partially reversed the judgment and stated that these replacement
channels were not to be granted exclusively if the channels were
made available to third parties prior to the merger with TPS. Parabole
Réunion was again unsuccessful in its claims concerning the content
of the channels in question. On September 19, 2008, Parabole Réunion
appealed to the French Supreme Court. On November 10, 2009, the
French Supreme Court dismissed the appeal brought by Parabole
Réunion. In the context of this dispute, various jurisdictions have
taken the opportunity to recall that in the event of the loss of the
TPS Foot channel, Canal+ Group must make available to Parabole
Réunion a channel of similar attractiveness. Non-compliance with
this order would result in a penalty. On September 24, 2012, Parabole
Réunion filed a claim against Canal+ France, Canal+ Group and Canal+
Distribution before the enforcement magistrate of the Court of First
Instance of Nanterre (
Tribunal de grande instance de Nanterre
) seeking
enforcement of this fine (a request for such enforcement having been
previously rejected by the enforcement magistrate of Nanterre, the Paris
Court of Appeal and the French Supreme Court). On November 6, 2012,
Parabole Réunion expanded its claim to cover the TPS Star, Cinecinema
Classic, Cult and Star channels. On April 9, 2013, the enforcement
magistrate dismissed in part Parabole Réunion’s claim and declared
the rest inadmissible. He took care to recall that Canal+ Group had
no legal obligation with respect to the content or the maintaining of
programming on channels made available to Parabole Réunion. Parabole
Réunion filed an appeal against this judgment.
In parallel, on August 11, 2009, Parabole Réunion filed a complaint
against Canal+ Group before the Paris Tribunal of First Instance,
requesting that the Tribunal order Canal+ Group to make available a
channel with a level of attractiveness similar to that of TPS Foot in 2006
and to pay damages.
On April 26, 2012, Parabole Réunion filed a complaint against
Canal+ France, Canal+ Group and Canal+ Distribution before the Paris
Tribunal of First Instance asking the Tribunal to acknowledge the failure
of the companies of the Group to fulfill their contractual obligations to
Parabole Réunion and their commitments to the Ministry of Economy.
These two actions have been consolidated into a single action.
Action brought by the French Competition Authority
regarding Practices in the Pay-TV Sector
On January 9, 2009, further to its voluntary investigation and a
complaint by Orange, the French Competition Authority sent Vivendi and
Canal+ Group a notification of allegations. It alleges that Canal+ Group
has abused its dominant position in certain Pay-TV markets and that
Vivendi and Canal+ Group colluded with TF1 and M6, on the one hand,
and with Lagardère, on the other. Vivendi and Canal+ Group have each
denied these allegations.
On November 16, 2010, the French Competition Authority rendered a
decision in which it dismissed the allegations of collusion, in respect of
all parties, and certain other allegations, in respect of Canal+ Group. The
French Competition Authority requested further investigation regarding
fiber optic TV and catch-up TV, Canal+ Group’s exclusive distribution
rights on channels broadcast by the Group and by independent channels
as well as the extension of exclusive rights on TF1, M6 and Lagardère
channels to fiber optic and catch-up TV. On October 30, 2013, the French
Competition Authority took over the investigation into these aspects of
the case.
Annulment of the Decision Authorizing the Acquisition
of Direct 8, Direct Star, Direct Productions, Direct Digital,
and Bolloré Intermédia
In November 2012 and January 2013, TF1 and M6 submitted to the
French Council of State an action for annulment of the decisions taken
by the French Competition Authority and the CSA (French authority for
media networks) authorizing the acquisition by Canal+ Group of Direct 8,
Direct Star, Direct Productions, Direct Digital and Bolloré Intermédia.
On December 23, 2013, the French Council of State annulled the French
Competition Authority’s decision with effect from July 1, 2014, and
partially annulled the decision of the CSA. On January 15, 2014, the
transaction was re-notified to the French Competition Authority.
On April 2, 2014, the French Competition Authority re-authorized,
subject to a number of commitments, the acquisition by Canal+ Group
of Direct 8, Direct Star, Direct Productions, Direct Digital and Bolloré
Intermédia.
Canal+ Group against TF1, M6, and France Télévision
On December 9, 2013, Canal+ Group filed a complaint with the French
Competition Authority against the practices of the TF1, M6 and
France Télévision groups in the original French-language film market.
Canal+ Group accused them of inserting pre-emption rights into co-
production contracts, in such a way as to discourage competition.
Canal+ Group against TF1, and TMC Régie
On June 12, 2013, Group Canal+ SA and Canal+ Régie filed a complaint
with the French Competition Authority against the practices of TF1
and TMC Régie in the television advertising market. Group Canal+ SA
and Canal+ Régie accused them of cross-promotion, having a single
advertising division and refusing to promote the D8 channel during its
launch.
