314
Annual Report -
2013
-
Vivendi
4
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 28. Litigation
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Canal+ Group against TF1, M6,
and France Télévision
On December 9, 2013, Canal+ Group filed a complaint with the French
Competition Authority against the practices of the TF1, M6 and France
Télévision groups in the original French-language film market. Canal+
Group accused them of inserting pre-emption rights into co-production
contracts, in such a way as to discourage competition.
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Canal+ Group against TF1, and TMC Régie
On June 12, 2013, Group Canal+ SA and Canal+ Régie filed a complaint
with the French Competition Authority against the practices of TF1
and TMC Régie in the television advertising market. Group Canal+ SA
and Canal+ Régie accused them of cross-promotion, having a single
advertising division and refusing to promote the D8 channel during its
launch.
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Complaints against music industry majors
in the United States
Several complaints have been filed before the Federal Courts in New
York and California against Universal Music Group and the other music
industry majors for alleged anti-competitive practices in the context of
sales of CDs and Internet music downloads. These complaints have
been consolidated before the Federal Court in New York. The motion
to dismiss filed by the defendants was granted by the Federal Court, on
October 9, 2008, but this decision was reversed by the Second Circuit
Court of Appeals on January 13, 2010. The defendants filed a motion for
rehearing which was denied. They filed a petition with the US Supreme
Court which was rejected on January 10, 2011. The discovery process
is underway. The Court has decided that the proceedings on class
certification will be completed in the second half of 2014.
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Complaints against UMG regarding royalties
for digital downloads
Since 2011, as has been the case with other music industry majors,
several purported class action complaints have been filed against UMG
by recording artists generally seeking additional royalties for on line
sales of music downloads and master ringtones. UMG contests the
merits of these actions.
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Koninklijke Philips Electronics against UMG
On April 30, 2008, Koninklijke Philips Electronics filed suit against UMG
in the District Court for the Southern District of New York claiming
breach of contract and patent infringement in connection with a license
to manufacture CDs. On March 1, 2013, a jury rendered an unfavorable
verdict against UMG. On August 8, 2013, the parties entered into a
settlement agreement that ended this dispute.
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Telefonica against Vivendi in Brazil
On May 2, 2011, TELESP, Telefonica’s Brazilian subsidiary, filed a claim
against Vivendi before the Civil Court of São Paulo (
3ª Vara Cível do
Foro Central da Comarca da Capital do Estado de São Paulo
). The
Company is seeking damages for having been blocked from acquiring
control of GVT and damages in the amount of 15 million Brazilian
reals (currently approximately 4.7 million euros) corresponding to the
expenses incurred by TELESP in connection with its offer for GVT. At the
beginning of September 2011, Vivendi filed an objection to jurisdiction,
challenging the jurisdiction of the courts of São Paulo to hear a case
involving parties from Curitiba. This objection was dismissed on
February 14, 2012, which was confirmed on April 4, 2012 by the Court
of Appeals.
On April 30, 2013, the Court dismissed Telefonica’s claim for lack
of sufficient and concrete evidence of Vivendi’s responsibility for
Telefonica’s failing to acquire GVT. The Court notably highlighted the
inherently risky nature of operations in the financial markets, of which
Telefonica must have been aware. Moreover, the Court dismissed
Vivendi’s counterclaim for compensation for the damage it suffered as a
result of the defamatory campaign carried out against it by Telefonica.
On May 28, 2013, Telefonica appealed the Court’s decision to the
5
th
Chamber of Private Law of the Court of Justice of the State of São
Paulo.
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Dynamo against Vivendi
On August 24, 2011, the Dynamo investment funds filed a complaint
for damages against Vivendi before the Bovespa Arbitration Chamber
(São Paulo stock exchange). According to Dynamo, a former shareholder
of GVT that sold the vast majority of its stake in the Company before
November 13, 2009 (the date on which Vivendi took control of GVT),
the provision in GVT’s bylaws providing for an increase in the per share
purchase price when the 15% threshold is crossed (the “poison pill
provision”) should allegedly have applied to the acquisition by Vivendi.
Vivendi, noting that this poison pill provision was waived by a GVT
General Shareholders’ Meeting in the event of an acquisition by Vivendi
or Telefonica, denies all of Dynamo’s allegations. The arbitral tribunal
has been constituted and a hearing before the Bovespa Arbitration
Chamber should be scheduled shortly. In parallel, on February 6, 2013,
Dynamo filed an application with the 21st Federal Court of the capital of
the State of Rio de Janeiro to compel CVM and Bovespa to provide the
arbitral tribunal with confidential information relating to the acquisition
of GVT by Vivendi. This was rejected on November 7, 2013 as the Court
found that only the arbitral tribunal could make such an application.
In late December, Dynamo requested that the arbitral tribunal submit an
application for the confidential information from the judge.
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Hedging-Griffo against Vivendi
On September 4, 2012, the Hedging-Griffo funds filed a complaint
against Vivendi before the Arbitration Chamber of the Bovespa (São
Paulo Stock Exchange) seeking to obtain damages for losses they
allegedly incurred due to the conditions under which Vivendi completed
the acquisition of GVT in 2009. On December 16, 2013, the arbitral
tribunal was constituted and the plaintiffs submitted their initial briefs.
The Hedging-Griffo funds demanded compensation for the difference
between the price at which they sold their GVT shares on the market
and 125% of the price paid by Vivendi in connection with the tender
offer for the GVT shares, pursuant to the “poison pill” provision in
GVT’s bylaws. Vivendi believes that the decision taken by the Hedging-
Griffo funds to sell their GVT shares before the end of the stock market
battle that opposed Vivendi against Telefonica was their own decision
made in the context of their management of these funds and can in no
way be attributable to Vivendi. It also denies any application of the
bylaw provision mentioned above, as it was waived by a GVT General
Shareholders’ Meeting in the event of an acquisition by Vivendi or
Telefonica.
