Supreme Court decision
In a March 7 2017 judgment, the Supreme Court set aside an order of the Competition Appellate Tribunal (COMPAT) and held that the prohibition on a dubbed television series violated Section 3(3)(b) of the Competition Act.(1) The court upheld the original Competition Commission of India (CCI) majority order, which had been set aside by the April 2 2014 COMPAT order.
The information before the CCI was filed by Sajjan Kumar Khaitan, proprietor of M/s Hart Video, Kolkata, which distributed regional television series for broadcasting in East India, including West Bengal. Hart Video had dubbed the television series Mahabharata in Bengali, with intent to distribute this for broadcast in West Bengal through channels CTVN+ and Channel 10. However, various East India television producers – under the Eastern India Motion Picture Association (EIMPA) and the Committee of Artists and Technicians of West Bengal Film and Television Investors – opposed the broadcast, claiming that entry into the market of series produced in other languages and dubbed for release to the public in their own language may deter production of such series in Bengali. Both the EIMPA and the committee wrote letters to CTVN+ to stop the broadcast of the dubbed series, and warned CTVN+ and Channel 10 that if broadcasting did not stop, they would face non-cooperation from the two groups.
Khaitan filed this information with the CCI, which referred the matter to its director general for investigation.
During investigation, the director general defined the relevant market as the "film and television industry of West Bengal". Further, the director general found that the conduct of the committee and the EIMPA in threatening non-cooperation, holding demonstrations and organising strike action – which stopped Channel 10's broadcast of the series (although CTVN+ continued to show it) – amounted to a restriction of commercial exploitation and was therefore unjustified. The director general found that such conduct amounted to "limiting and restricting the market through an anti-competitive agreement", which violated Section 3(3)(b) of the Competition Act.
The CCI agreed with these findings. Since Channel 10 had succumbed to pressure from the EIMPA and the committee, the CCI considered that the groups' conduct amounted to a restriction of competition, which fell within the ambit of Section 3 of the Competition Act. The EIMPA and the committee had violated this provision, since their conduct had an adverse effect on competition.
The coordination committee appealed.
COMPAT disagreed with the CCI on the relevant market, holding that it was not the film and television industry in the state of West Bengal, but rather the market for the television broadcast of the dubbed series in West Bengal.
Noting Section 3(3) of the Competition Act, COMPAT concluded that the committee had not traded in any goods or provided any services, much less identical or similar goods or services. Therefore, an 'agreement' pursuant to Section 3 had not been entered into. According to COMPAT, Section 3(3)(b) of the Competition Act applies only to competitors in the same line of commercial activity which, by agreement, tend to restrict competition. No evidence to this effect was available in this case. Instead, the committee had merely voiced its grievance for the benefit of members; even if such conduct was wrong and the committee had been influenced by foul play when claiming that broadcasting the dubbed television series would affect members' future prospects of work, these factors alone did not constitute a competition issue under the Competition Act.
Considering the CCI's appeal, the Supreme Court disagreed with COMPAT on the relevant market, as this was not limited to broadcast of the series but rather encompassed the entire West Bengal film and television industry. Even the committee had perceived that broadcasting the Bengali-dubbed version of Mahabharat would affect the whole industry.
Further, the Supreme Court held that the committee was an "association of enterprises" which joined together in calling for the boycott of competing members. The court noted that the CCI rightly observed that protection in the name of language goes against the interests of competition, as it deprives consumers of choice. The committee's actions had caused harm to consumers by depriving them of the opportunity to watch the television series on the respective television channel. Such conduct violated Section 3(3)(b) of the Competition Act. Therefore, the appeal was upheld and the COMPAT order set aside.
For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4249 2525) or email ([email protected]). The Vaish Associates website can be accessed at www.vaishlaw.com.
(1) Supreme Court of India order dated March 7 2017. For full text see www.supremecourt.gov.in/.