CCI imposes Rs 46 lakh penalty on 7 regional film bodies

Competition watchdog CCI has imposed a penalty of over Rs 46 lakh on seven regional film bodies for engaging in anti-competitive practices in stopping exhibition of certain films, the body said in a order.

The move will benefit big players like Reliance Big and UTV Software Communications.

The Commission said that due to the anti-competitive practices of such associations, "distributors like Reliance Big Entertainment and exhibitors like Big Cinemas have lost monetarily."

It added that the producers-distributors and exhibitors were obliged to follow the dictates and directions of the associations such as Karnataka Film Chamber of Commerce and Bihar and Jharkhand Motion Pictures Association, and if they they refused, they were punished or boycotted.

"Looking at the gravity of the allegations, the Commission decides to impose a penalty on each of these associations at the rate of 10 per cent of the average of the three years receipts/income," the CCI said in the order.

The Commission asked the associations to stop compelling any producer, distributors or exhibitor to become its member as a pre-condition for exhibition of their films in the regions. It also them to make changes in rules that discriminate between regional and non-regional films.

CCI directed all the associations to cease and desist from following the practices and asked them to modify their "articles of association, rules and regulations... since they are anti-competitive" and "were not making markets perform efficiently", the order said.

"They are in fact restricting and limiting the market in form of limit on supplies of films since without becoming a member, without registering their films with the associations, no producer or distributor or exhibitor can exploit their films and compete with the existing members of the associations," CCI noted.

It also directed the associations to stop restricting exhibition of films on the basis of language and dictating terms for release of films through other media like CD, and satellite.

The CCI order was based on the findings of the Director General (Investigations), who probed the matter after separate complaints received from Reliance Big Entertainment, UTV Software Communications, FICCI Multiplex Association and Eros International Media.

CCI is empowered by an Act of Parliament to look into anti-competitive agreements and abuse of dominant position by market players.