The French Competition Authority (FCA) has ruled that priority and pre-emptive rights included in media pre-financing contracts have no cumulative foreclosure effect on the market of purchase of “French language catalogue films”.

Canal Plus lodged a complaint against TF1, France Télévisions and Métropole Télévision for their inclusion of priority and preemption clauses in French-language film financing contracts.

The FCA upheld that the rights cover a non-significant part of the available catalogue (20%) and that pre-emption clauses are rarely exercised in practice (only 8% of bids received were preempted by one of the broadcasters), so there was no significant impact on broadcasters’ ability to effectively compete on the market.

Joseph Vogel, partner at Vogel & Vogel law firm and adviser to TF1 commented:

Even if the percentage had been 100%, that doesn’t mean that the priority and preemption clauses would have been unlawful. The claimant should have demonstrated that these rights have a foreclosure effect on the market, but the authority’s decision underlines that they had no foreclosure effects.”

He added: “The rights represent compensation for the pre-financing risk undertaken by broadcasters in French film investment.”

The firm recently represented TF1 against M6 in an abuse of dominance case relating to TV advertising.

TF1 was represented by partners Joseph Vogel and Cécile Assémat.