In Ajay Devgn Films v Yash Raj Films Private Limited & Others, the Competition Commission of India (CCI) ruled that an agreement between Yash Raj Films and its associated enterprises did not contravene sections 3 or 4 of the Competition Act, 2002, which deal with anti-competitive agreements and abuse of dominant position respectively. The CCI held that the agreement was “purely commercial in nature” and that Ajay Devgn Films had not provided data to show that Yash Raj Films was dominant in the relevant market.
Ruling on the allegedly anti-competitive agreement the CCI held that “the market of exhibition of new films on single screen theatres in the context of this case is not of enough significance to cause an appreciable adverse effect on the competition”, and restraint orders cannot be issued in respect of agreements which are of minor importance.
Regarding the complaint that Yash Raj Films was abusing its dominant position the CCI said: “no enterprise can be considered dominant on the basis of a big name”. Dominance has to be determined on the basis of market share, economic strength and other factors stated in section 19(4) of the act.
The CCI was acting on a complaint filed by Ajay Devgn Films regarding an agreement for the exhibition of two films produced by Yafsh Raj Films, whereby the right to screen a film was linked to a requirement that screen operators also screen a second film that was scheduled for later release. Ajay Devgn Films argued that as a result of this agreement a film that it was to be released at the same time as Yash Raj Films’ second film would be denied access by the screen operators.
The CCI’s order has been challenged before the Competition Appellate Tribunal.
The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at [email protected] or [email protected] Readers should not act on the basis of this information without seeking professional legal advice.