CCI Dismisses Allegations of Anti-Competitive Practices against Multiple Cinema Theatres

On July 24, 2019, CCI dismissed allegations made by Unilazer Ventures Private Limited (‘Informant’) of the infringement of Section 3 of the Act against PVR Limited, Inox Leisure Limited, Cinepolis India Private Limited, Carnival Motion Pictures Private Limited (collectively ‘Exhibitors’) and FICCI Multiplex Association of India (‘FICCI’). [1]

The allegations pertained to: (i) imposition of Virtual Print Fee (‘VPF’) post the end of period of contract by the Exhibitors coupled with an alleged worldwide agreement of Hollywood studios with multiplexes in India and collusion among FICCI and the Exhibitors to charge the same VPF; (ii) collusion among the Exhibitors under the aegis of FICCI to put forth a non-negotiable revenue sharing agreement which only favours the Exhibitors; (iii) untimely remittal of the revenue sharing meant to be forwarded to the content creators after collection of prices from customers; (iv) the practice of not sharing a portion of revenues derived by the Exhibitors from sale of food/beverages, car parking, advertising, merchandise etc. with the producers/distributors; and (v) instances of discrimination by the Exhibitors against the Informant for releasing the Informant’s film.

With respect to the allegation on collusion among the Exhibitors, CCI held that no indication of any such agreement or arrangement was placed on record and there was a lack of evidence demonstrating meeting of minds. CCI further observed that mere parallel conduct does not demonstrate collusion and noted that the Exhibitors were willing to negotiate with the Informant. With respect to the allegation on imposition of VPF, CCI observed that there was no formal/written agreement which determined the period of contract. CCI further held that the issues pertaining to terms of revenue sharing agreement are commercial /contractual in nature.  With respect to the allegation of delayed payments, CCI held that there is no evidence which shows collusion among Exhibitors. Lastly, CCI dismissed the allegation on non-sharing of revenues derived from sale of food/beverages, car parking, sale of merchandise etc. on the grounds that the allegation does not fall within the ambit of the provisions of the Act. Accordingly, CCI dismissed the complaint.

[1] Case No. 10 of 2019.

Published In:Inter Alia Special Edition- Competition Law - September 2019 [ English
Date: September 21, 2019