CCI Disposes Information Against Producers of ‘Padman’ and ‘Padmavat’*

On June 1, 2018, CCI disposed of information filed by Shri Kshitiz Arya and Shri Purushottam Anand against Viacom18 Media Private Limited (‘Viacom18’),  Bhansali Productions, Ms Twinkle Khanna, Kriarj Entertainment Private Limited (‘Kriarj Entertainment’), Side Films India Limited (‘Side Films’), Cape of Good Films Private Limited (‘COG Films’) and Hope Productions Private Limited (‘Hope Productions’) alleging violation of the provision of Section 3(3) of the Competition Act.

Viacom 18 and Bhansali Productions are the producers of the movie ‘Padmavat’ and the other enterprises are the producers of the movie ‘Padman’. The informants contended that the parties had allocated different time periods to release their respective movies as to avoid competition. ‘Padman’ was scheduled to release on January 25, 2018, the same date as of ‘Padmavat’, but due to protests and the litigation of ‘Padmavat’, the producers of ‘Padman’ agreed to reschedule the release to February 2, 2018. It was alleged that the sharing and allocation of time period for film releases between different filmmakers was aimed at increasing the profits of the filmmakers by reducing competition, thus amounting to collusion and market sharing within the ambit of Section 3(3)(c) of the Competition Act.

CCI observed that there were legitimate commercial reasons why ‘Padmavat’ and ‘Padman’ were released on the dates on which they were actually released. Releasing a movie is a strategic and tactical business decision taken by the producers based on a number of factors such as revenue sharing, branding, distribution expenditure and piracy. CCI noted that the strategy of production houses releasing mega budgeted movie in a manner whereby they did not compete with each was not unfair as both the movies cannot be released simultaneously in maximum number of screens. It was further observed that such a strategy reduces commercial risks and maximizes earning potential.

In light of the above, CCI opined that such decisions, which are a result of market outcome, are legitimate business decisions rather than an anti-competitive practice. CCI further concluded that no case for the alleged anti-competitive conduct was made out against the makers of ‘Padmavat’ and ‘Padman’, and accordingly disposed off the information under Section 26(2) of the Competition Act.