Your file is not encoded to Latin-1 (iso-8859-1). You created a Mojibake instead; if interpreted as a Unicode string I had to encode back to Latin-1 then decode as UTF-8 instead:
>>> print u"L'équipe le quotidien.".encode('latin1').decode('utf8')
L'équipe le quotidien.
Generally speaking, you'd decode both files to unicode
objects before comparing. Even then, you can still run into issues with Combining Diacritical Marks, where the letter é
is actually represented with two codepoints, U+0065 LATIN SMALL LETTER E and U+0301 COMBINING ACUTE ACCENT.
You can work around that up to a point by normalising the text; pick one of decomposed or composed and normalise both strings to the same form; use the unicodedata.normalize()
function. See Normalizing Unicode for more details on that.