On April 30, 2020, the FCA dismissed Molotov’s complaint of alleged abuse of collective dominance, abuse of economic dependency and anticompetitive agreements against TF1 and M6.
Background
Molotov is a television channel distribution platform that provides users with free, real-time television services, including TF1 and M6’s TV programs. Molotov’s revenues are generated from additional paid-for functionalities, such as recording or catch-up TV. Between 2017 and 2019, both M6 and TF1 imposed new financial conditions on Molotov. Molotov disagreed, finding that such financial conditions would make its “freemium” model impracticable, and no agreement was reached. M6 and TF1 terminated their distribution agreements with Molotov, in March 2018 and June 2019, respectively. Concurrently, TF1, M6 and France Télévisions agreed to create a joint video-on- demand platform, Salto, which aimed to distribute their respective television programs. The FCA cleared the creation of Salto in August 2019.[1]
The FCA’s decision
In July 2019, Molotov lodged a complaint with the FCA. Molotov alleged that M6 and TF1 had imposed unfavorable financial conditions and terminated their distribution agreements in order to exclude it from the market, because they intended to set up a competing joint platform. Molotov alleged that this conduct constituted both an abuse of collective dominance and an abuse of economic dependency and was thus contrary to Article 102 TFUE and Article L. 420-2 of the French Commercial Code.
The FCA dismissed Molotov’s complaint on both grounds. First, it found that M6 and TF1 did not hold a dominant position collectively with France Télévisions. The FCA reaffirmed that, to prove a collective dominant position, one has to demonstrate that the allegedly dominant parties are – together –able to adopt a common policy on the market and act independently from their competitors, customers and consumers. Such a shared policy can result from structural links between the parties (i.e., capitalistic or legal links, such as contracts) or from the market’s structure (i.e., if the market is oligopolistic and sufficiently transparent for the parties to be able to predict each other’s behavior). In the case at hand, the FCA found that TF1, M6 and France Télévisions did not hold a collective dominant position because no sufficient structural links existed among them at the time of the alleged practices[2] (TF1 and M6 jointly hold a television channel, but this factor was deemed insufficient). In addition, the FCA found that the common policy criteria had not been fulfilled because France Télévisions had maintained its distribution agreement with Molotov and, as a publicly-owned entity, was in a distinct situation from the privately-owned TF1 and M6. Indeed, contrary to TF1 and M6, France Télévisions is legally required to make its channels available to distributors. This finding of the FCA is consistent with its established case law setting high standards of proof to establish a situation of collective dominance. Its decisional practices shows that it has rarely found collective dominance.[3]
Second, the FCA dismissed the claim of abuse of economic dependency. It considered that a situation of economic dependency must be assessed individually for each contractual relationship. Therefore, Molotov could not allege that it was economically dependent from both TF1 and M6 (taken together).
Finally, the FCA rejected the claims relating to anticompetitive agreements for lack of evidence. Indeed, the FCA found that the clause contained in M6’s general terms and conditions (“T&C”), criticized by Molotov, could not result from an anticompetitive collusion, because the T&C had been unilaterally imposed by M6 on Molotov.
Conclusion
This decision is an important milestone in the judicial saga pitting the pure player Molotov against the leading TV channels before the French courts. In April 2018, Molotov successfully brought a claim before the Paris Commercial Court seeking to have M6’s new financial conditions declared null and void. In April 2018 and July 2019, M6 and TF1 respectively filed a complaint before the Paris Tribunal de Grande Instance for counterfeiting and free riding practices. Both cases are still pending.
Molotov can appeal the FCA’s decision until July 24.[4]
[1] Decision 19-DCC-157 of August 12, 2019.
[2] The FCA did not take into account the creation of Salto as it was not cleared until after the alleged practices had ended.
[3] See for example Decision 12-D-06 for a group of undertakings belonging to a joint structure (an economic interest group) and jointly controlling a quarry; see also Decision 06-D-02 of February 20, 2006 for four undertakings operating jointly and holding the shares of the three manufactures of the area.
[4] Indeed, all appeal deadlines falling within the state of health emergency plus one month will restart from scratch on June 24, 2020 (cf. Ordinance No. 2020-560 of May 13, 2020 on the deadlines applicable to various procedures during the state of health emergency, Article 1st, I.). The FCA’s decisions can be appealed within one month following the notification of the decision pursuant to Article L.464-8 of the French Commercial Code.