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EC has concerns about Canal Plus Orange Cinéma Séries deal

The European Commission has expressed concerns about French pay TV operator Canal Plus’ proposed acquisition of a stake in rival Orange’s Orange Cinéma Séries channels, according to various reports.

Canal Plus and Orange struck a deal in July a deal whereby the former would acquire 33.3% of Orange Cinéma Séries. However, French press have reported that European competition commissioner Joaquin Almunia’s department has expressed a number of concerns about the future role of Canal Plus relating to the programming of the channels.

Specifically, the Commission has concerns about the agreement’s limiting of the amount the Orange channels can spend on programme acquisitions annually of €65 million, compared with the €85 million it spent in 2010. This would limit Orange Cinéma Séries’ bidding power in negotiations with the studios, meaning, for example, that it could not effectively compete with Canal Plus’s own channels.

While Canal Plus and Orange have maintained that their agreement does not raise any issues of concentration in the market, the European competition authorities believe that the terms of the deal could amount to ‘co-control’ by Canal Plus, meaning that it would be subject to formal approval by Brussels and could be subject to multiple obligations.