CCI dismisses complaint against cinema owners

CCI dismisses complaint against cinema owners

The Competition Commission of India (CCI) dismissed a complaint filed by Unilazer Ventures against FICCI Multiplex Association of India and its members for allegedly carrying out anti-competitive practices.

“[This] is an important decision, where CCI has clarified that the initial burden of proof must be discharged by the complainant,” said Vaibhav Choukse, a partner at J Sagar Associates (JSA), which advised one of FICCI’s members, Cinepolis India. “[The regulator stated] it is the responsibility of the complainant to place on record any agreement between the cartel participants, which evidences meeting of minds.”

The other members named in the complaint are PVR, Inox Leisure and Carnival Motion Pictures.

Choukse added that future complainants will have to bear in mind that making assertions without proof will not be sufficient to warrant an investigation by the CCI.

The complaint had alleged that the members involved formed a cartel to: (1) charge an undue imposition of virtual print fee; (2) impose non-negotiable revenue sharing terms; (3) delay advances and payments made to content companies; and (4) create a lack of transparency regarding the advertising and promotion policy during the exhibition of a film.

The virtual print fee is paid by a film producer or distributor to the single screen or multiplex theatre for it to recover part of purchase price of digital cinema projection equipment by exhibitors.

Before the CCI, Cinepolis stated that its business decisions were based on independent commercial understanding, and not in concert with other multiplex operators. The CCI agreed and observed that mere alleged parallel conduct in an oligopolistic market was not sufficient to establish a cartel warranting an investigation.

The JSA team comprised partners Amitabh Kumar and Vaibhav Choukse, principal associate Unnati Agrawal and associate Parth Sehan.

DSK Legal partner Chandrima Mitra, counsel Abhishek Singh Baghel and associate lawyer Arbab Hussain advised Unilazer. Economic Laws Practice partner Ravisekhar Nair, associate partner Parthsarathi Jha and associate manager Krushika Choudhary advised PVR. Cyril Amarchand Mangaldas partner Avaantika Kakkar, principal associate Dhruv Rajan and associates Sree Ramya Hari and Balaji Venkata Krishnan advised Inox Leisure.