CCI rejects complaint filed by Sarv Prakash Developers against Phantom Films, Zee & Essel Group and Fox Star India [Read order]

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The Competition Commission of India by its order dated March 8, 2018 [Read order here] refused to entertain a complaint filed by Sarv Prakash Developers (Informant) under Section 19(1)(a) of the Competition Act, 2002 alleging that the Opposite Parties (i.e. Phantom Films, Zee & Essel Group and Fox Star India) were in contravention of the provisions of Section 3 of the Competition Act by refusing to exhibit their films in the cinema/ multiplex of the Informant.

The Informant claimed to be the owner of Sarv SRK Mall at Agra, Uttar Pradesh. After running the multiplex for some time, the Informant leased the same to one SRS Ltd., Faridabad for future operations. Thereafter, there was a dispute between the Informant and the said SRS Ltd and subsequently the lease deed between the Informant and SRS Ltd was terminated and possession of the multiplex was handed over to the Informant.

The Informant’s case was that the Sanction Order given to the Informant by the Competent Authority mandated that there would be concurrent operation of the mall and the multiplex and in case of non-operation of the multiplex, the sanction would be cancelled for the whole premises. The Informant accordingly appointed an agent Shri Sanjay Ghai for procuring exhibition/ display rights of certain movies from the Opposite Parties which was apparently refused by the Opposite Parties for reasons relating to the right of the Informant to operate the cinema/ multiplex.

The Informant alleged that the Opposite Parties were acting in a collusive manner at the behest of SRS Ltd owing to the coordinated and parallel conduct of refusing the exhibition rights to the Informant. The Informant further alleged that the conduct of the OP’s indicates an understanding between them to limit and control the supply of exhibition of movies in cinema screens of the Informant, thus contravening the provisions of Section 3(3)(b) read with Section 3(1) of the Act. Further, that stalling the exhibition of movies in the Informant’s theatre by taking undue advantage of the dispute between SRS Ltd and the Informant and non-supply of movies amounts to refusal of deal in violation of Section 3(4)(d) of the Act. [Section 3 of the Act deals with anti-competitive agreements].

CCI observed that the cinemas/ theaters have the option of simultaneously procuring rights of exhibition of movies from multiple distributors and hence it could not be said that the alleged non-supply of movies by the Opposite Parties created barriers for the Informant to operate in the cinematographic exhibition market. The Commission further observed that the OPs are not the only producers/ distributors of movies and there were many number of producers/ distributors in the business of production/ distribution of movies with significant presence. Further the Informant failed to provide any material to substantiate the allegations mentioned in the information. As regards the allegation of collusion, CCI perused the  communications exchanged between the parties, and did not find any refusal on the part of the OPs to deal nor any action in concert amongst the OPs was found to be inferred which denied the Informant access to the movies. CCI further noted that the Informant has been exploiting several films in their cinema theatre.

Due to the absence of any material, no conclusion of collusive refusal to deal was found to be drawn and accordingly CCI did not find any contravention under Section 3 of the Act.