Applicable
Act: The Competition Act,
2002 (The Act)
ALLEGATIONS
The informant approached CCI for
contravention of the provisions of Section 3 and 4 of the Competition Act, 2002
which pertained to anti-competitive agreements and abuse of dominant position.
BRIEF
OF FACTS
· The
informant obtained distribution rights from Balaji Real Media Private Limited
for Tamil film ‘Osthi’, remake of Hindi film Dabbang. It granted the
distribution rights for Tamil Nadu, Karnataka and Kerala to M/s Kural TV
Creations Pvt. Ltd and assigned the Satellite Rights to Sun TV Network Ltd. for
the said film.
· The
defendant ordered its member theatre owners not to screen the film since Sun TV
owed certain amount to it.
· On a
report prepared and submitted by the DG to CCI, it was concluded that the
defendant was the biggest and most influential association of cinema theatre
owners in Tamil Nadu with about 80-90% exhibitors as its members.
· The
defendant held a dominant position in the market which enabled it to control
the market and restrict services for producers and distributors and also
decided about settlement issues of its members.
· The
defendant decided to impose ban on the films which had dealings with M/s Sun TV
and directed members to not screen the films unless payments were made.
CONCLUSION
The report of the DG depicted the
impugned conduct of the defendant. The decision to not screen the film affected
adversely the distributors and producers as they were not able to book the
theatres on account of the ban.
Based on the above facts, it was held
that the defendant acted in contravention of the provisions of Section 3(3)(b).
As per Section 3(1), no enterprise or
association of enterprises or person or association of persons can enter into
any agreement in respect of production, supply, distribution, storage,
acquisition or control of goods or provision of services, which causes or is
likely to cause an appreciable adverseeffect on competition within India.
According to Section 3(3)(b), any agreement which limits or controls
production, supply, markets, technical development, investment or provision of
services shall be presumed to have an appreciable adverse effect on competition.
The onus to rebut this presumption would lie upon the defendant.
In the present case, the defendant
could not show how the impugned conduct resulted into accrual of benefits to
consumers or made improvements in production or distribution of goods in
question or how the said conduct did not foreclose competition.
DECISION
The Commission decided to impose a
penalty on the opposite party at the rate of 10% of its average turnover for
contravention of the provisions of Competition Act.
