Brussels, 16/10/2000 (Agence Europe) - The European Commission authorised the acquisition of the Canadian Seagram and its subsidiary Canal+, though by setting certain conditions. The merger had been notified last June, but had raised numerous questions over three specific markets: pay per view television, the emerging pan-European market for portals and the merging market for on-line music.
Concerning the first part, the Commission felt that, due to the near-certain exclusive access of Canal+ to films produced by Universal Studios (subsidiary of Seagram), Canal+ would reinforce its dominant position in a certain number of national market for pay per view television. In order to remedy this situation, Vivendi proposed access for competitors to the production and the co-production of films by Universal Studios, undertaking that would limit to 50% access to "first window" (that is to say the first televised broadcast of a film) by Canal+ to rights of films by the American studio. This undertaking covers the countries where Canal+ is active (that is to say France, Belgium, Italy, the Netherlands, Spain and the Nordic countries) and for a duration of five year. The parties also proposed to divestment of the 24% stake held by Vivendi within the British pay-TV company BSkyB. Vivendi is in fact allied to the News Corp group, within BSkyB which could have lead to a regrouping within cinema with the grouping between Universal and the American studio Fox, property of News Corp.
Concerning the two other points, the transaction posed some doubts as to the creation of a dominant position in the emerging pan-European market for portals and the merging market for on-line music through the addition of the musical content of Universal to Vizzavi, the multi-access portal of Vivendi. In order to obtain the assent of Brussels, Vivendi thus undertook to provide Vizzavi competitors with on-line access to Universal's music for a five yea period.
These significant undertakings have lifted concerns felt by the Commission, which as a result declared, as of the first phase of investigation (four weeks), the operation compatible with the common market.