Notice published pursuant to Article 19(3) of Council Regulation No 17 concerning an application for negative clearance or exemption under Article 81(3) of the EC Treaty (Case COMP/C2/38.287 — Telenor/Canal+/Canal Digital) (Text with EEA relevance)
Date: 2003-06-26
Institutions: European Commission
Subjects: economic concentration, merger control, pay television

C 149/16

EN

Official Journal of the European Union

26.6.2003

Notice published pursuant to Article 19(3) of Council Regulation No 17 (1) concerning an
application for negative clearance or exemption under Article 81(3) of the EC Treaty

(Case COMP/C2/38.287 — Telenor/Canal+/Canal Digital)

(2003/C 149/10)

(Text with EEA relevance)

I. THE NOTIFICATION

1. On 16 November 2001 Telenor Broadband Services AS
(‘TBS’) applied to the Commission, pursuant to Article 4
of Regulation No 17, for negative clearance under Article
the EEA
the EC Treaty and Article 53(1) of
81(1) of
Agreement or, alternatively, for exemption under Article
81(3) of
the EEA
the EC Treaty and Article 53(3) of
Agreement in respect of three agreements entered into
with inter alia Groupe Canal+ SA (‘Groupe Canal+’) and
its Nordic
subsidiary Canal+ Television AB (‘Canal+
Nordic’), respectively. The notified agreements stipulate
the conditions under which the parties intend to conduct
their pay-TV operations in the Nordic region, in particular,
the distribution of pay-TV premium content channels via
the direct-to-home (‘DTH’)
satellite platform of Canal
Digital AS (‘Canal Digital’) (2).

2. TBS is a subsidiary of

antenna

networks

(‘SMATV’)

transmission,

the Norwegian incumbent

tele-
communications operator Telenor AS and a provider of
inter alia TV services to consumers across the Nordic
region through DTH satellite
satellite
cable
master
networks. Groupe Canal+ is the film and TV division
of the Vivendi Universal group and produces, acquires
feature films, audio-visual works and
and distributes
sports
also
through its
produces pay-TV channels and distributes,
subsidiary Canal+ Nordic, bouquets of pay-TV channels
including pay-per-view (‘PPV’) and near-video-on-demand
(‘NVOD’) channels via cable networks and satellite TV
platforms in the Nordic region.

rights. Groupe

broadcasting

Canal+

and

3. TBS/Telenor/Canal Digital on the one hand and Groupe
Canal+/Canal+ Nordic on the other hand are hereinafter
referred to as ‘the parties’ to the notified agreements.

II. THE NOTIFIED AGREEMENTS

4. As from 1997 to 2001, TBS and Groupe Canal+ were
jointly running the DTH satellite platform of Canal
Digital, each of them holding 50 % of the shares in the
joint venture, respectively. The parties entered into the
notified agreements as a follow-up to the decision by
Groupe Canal+ in 2001 to divest of its shareholding in
Canal Digital and to transfer it
to TBS. The notified
agreements essentially aim at ensuring the sales transaction
as well as the continuity of supply that was hitherto
link between Canal
guaranteed by the vertical structural

Digital and Canal+ Nordic. The notified agreements
accordingly consist of:

— a sale and purchase agreement between inter alia
Groupe Canal+ and TBS regarding the sale of Groupe
Canal+' 50 % shareholding in Canal Digital to TBS,

— a distribution agreement between inter alia Groupe
Canal+ and TBS regarding the distribution of Canal+
Nordic's pay-TV premium content channels via DTH
through Canal Digital,

— an agreement

for

the supply of PPV and NVOD

channels by Canal+ Nordic to Canal Digital.

These agreements stipulate inter alia the following:

II.1. Pay-TV channel exclusivity

5. Groupe Canal+ grants TBS the exclusive right to distribute
Canal+ Nordic's pay-TV premium content
channels
through Canal Digital and renounces to own or operate
a competing DTH/SMATV distribution platform in the
Nordic
(‘pay-TV channel
exclusivity’). The exclusivity however does not affect
distribution of Canal+ Nordic's pay-TV premium content
channels through third party cable networks with more
than [. . .] (3) households
in the
Nordic region.

connected (‘CATV’)

ten years

during

region

II.2. Pay-TV channel non-compete

a

channel

6. TBS commits vis-à-vis Groupe Canal+ neither to own or
for
pay-TV premium content
operate
DTH/SMATV distribution nor
to distribute pay-TV
premium content channels of competing suppliers via
DTH, SMATV and certain smaller cable networks in the
Nordic region for a period of ten years (‘pay-TV channel
non-compete’). The non-compete however does not affect
distribution of third suppliers' pay-TV premium content
channels via CATV networks owned or controlled by
Telenor.

is

7. The non-compete

arrangement

coupled with a
mechanism for joint acquisition of certain content by the
parties. In addition, the parties have agreed on a range of
clauses affecting neighbouring markets including clauses
on cooperation on the market
the provision of
satellite transponder services and New Media markets.

for

(1) OJ 13, 21.2.1962, p. 62.
(2) Commission Notice, OJ C 340, 4.12.2001, p. 6.

(3) Confidential information.

26.6.2003

EN

Official Journal of the European Union

C 149/17

II.3. PPV/NVOD channel exclusivity and non-compete

— reduce the scope of the joint acquisition arrangement

(and

right

8. Canal+ Nordic furthermore grants Canal Digital
distribute

the
its
exclusive
PPV/NVOD movie
through DTH/SMATV,
smaller cable networks and Telenor's CATV networks in
the Nordic region for a period of five years (‘PPV/NVOD
channel exclusivity’).

obligation)

channels

to

9. The

is

exclusivity

combined with a non-compete
arrangement, under which Canal Digital may under
certain circumstances — after having
a
negotiation procedure with Canal+ Nordic — supply
additional PPV/NVOD channels and services from third
suppliers (‘PPV/NVOD channel non-compete’).

observed

III. REMEDIES PROPOSED BY THE PARTIES

10. The Commission had come to the preliminary conclusion
that a range of the relevant clauses in the form as notified
have as their object and/or effect to restrict competition
within the meaning of Article 81(1) of the EC Treaty and
Article 53(1) of the EEA Agreement and/or do not meet
the conditions set out in Article 81(3) of the EC Treaty and
Article 53(3) of the EEA Agreement.

11. On 31 March 2003 the parties submitted a proposal to
accommodate the Commission's provisional competition
concerns. They accordingly proposed to amend the
notified agreements so as to:

— reduce the length of the pay-TV channel exclusivity to

a maximum of four years,

— reduce the scope of the exclusivity by narrowing the
definition of DTH/SMATV distribution to cable
networks,

— reduce the length of the pay-TV channel non-compete
and joint acquisition arrangements to a maximum of
three years,

to premium content for pay-TV,

— reduce

the

length

of

the

PPV/NVOD channel

non-compete to a maximum of three years,

— reduce

the

length of

the

satellite

transponder

non-compete to a maximum of five years,

— eliminate bilateral rights of first refusal regarding the
acquisition and marketing of premium content and
new channels via New Media platforms.

IV. THE COMMISSION'S INTENTIONS

On the basis of the foregoing, the Commission intends to take
a favourable view in respect of the parties' revised exclusivity
and non-compete arrangements. Before adopting a favourable
opinion, the Commission invites third parties to send their
observations within one month of
this
(Hanns-Peter.Nehl@cec.eu.int), by fax (No
notice by e-mail
following address,
(32-2) 295 01 28) or by mail
quoting the reference Case No 38.287 — Telenor/Canal+/Canal
Digital:

the publication of

to the

Commission of the European Communities
Directorate-General for Competition
Anti-trust Registry
J-70
Office 0/28
B-1049 Brussels.

If a party considers that
its observations contain business
secrets or other confidential information, it must indicate the
passages which in its opinion ought not to be disclosed on the
ground that they contain business secrets or other confidential
material, and state the reasons. If the Commission does not
receive a request with reasons it will assume that the obser-
vations do not contain any confidential information.