RELIANCE BIG ENTERTAINMENT PVT. LTD. (INFORMANT) VS. TAMIL NADU FILM EXHIBITORS ASSOCIATION (DEFENDANT)

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.