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India – CCI Rejects Complaint Against Digital Cinema Initiatives L.L.C.

27 May, 2015

 


On April 22, 2015, CCI rejected a complaint against Digital Cinema Initiatives L.L.C. (‘DCI’), the Walt Disney Company India, Fox Star Studios, NBC Universal Media Distribution Services Pvt. Limited, Sony Pictures, Warner Bros and Paramount Films India Limited (collectively referred to as the ‘Studios’), filed by K. Sera Sera Digital Cinema Private Limited (‘KSS’). KSS had alleged that DCI was a platform for the Studios to indulge in cartelization and that DCI and the Studios (i) had entered into anti-competitive agreements; and (ii) were abusing their dominant position.

KSS alleged that—(i) the Studios were imposing revenue sharing agreements on cinema owners leading to an increase in ticket prices in contravention of Section 3(3)(a) of the Competition Act; (ii) by not allowing cinema owners to install projectors and servers of their choice the Studios and DCI were thus depriving a large number of viewers from watching movies in theatres of their choice, which contravened the provisions of Section 3(3)(b) of the Competition Act; (iii) DCI and the Studios were entering into anti-competitive tie-in agreements by requiring cinema owners and digital cinema companies to purchase and use DCI approved equipment; (iv) the Studios were restricting cinema owners to deal in equipment of KSS and other similar companies; (v) the conduct of DCI and the Studios amounted to refusal to deal; (vi) the Studios were abusing their dominant position by imposing unfair conditions; (vii) the Studios were denying market access to consumers of cinema theatres; and (viii) the Studios were leveraging their dominant position in the movie production sector to enter into and protect and monopolise the digital service providers market.

However, CCI observed that the DCI compliant format for movie distribution is better than non-DCI compliant technology both in terms of quality of the movies projected and security. CCI also observed that the DCI specifications ensured compatibility and inter-operability between all participants in the industry.

CCI further observed that KSS had not provided any cogent material to show that DCI or the Studios were dominant in the relevant market. It is notable that KSS had never identified a relevant market for the purposes of the complaint. CCI also observed that the conduct of the Studios and DCI did not fall into the category of abuse defined under the provisions of Section 4 of the Competition Act.

In light of the above, CCI terminated the investigation at the prima facie stage under Section 26(2) of the Competition Act.

AZB    

    

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com

Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com

Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

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