By way of a June 21 2017 order, the Competition Commission of India (CCI) dismissed allegations against Pen India Ltd, Bound Script Motion Pictures Pvt Ltd, UFO Moviez India Ltd and Real Image Media Technologies Pvt Ltd for violation of Sections 3 and 4 of the Competition Act.(1)
Defendants Pen India and Bound Script are the producers and presenters of the film Kahaani-2, and UFO and Real Image are digital cinema service providers (DCSPs) in India. The plaintiff is engaged in the business of digital cinema exhibition services involving digital projection and the screening of films in India.
The plaintiff claimed that the defendants had entered into an anti-competitive agreement to control the release of Kahaani-2 and deny other DCSPs operating in the market access to the film. It alleged that the defendants' conduct violated the Competition Act as it resulted in:
- a tie-in arrangement;
- an exclusive supply agreement; and
- a refusal to deal.
The defendants argued that Section 3(3) of the Competition Act was inapplicable. In addition, they relied on a news article which reported that Viacom18, producer of the film Force 2, had registered a first information report against the plaintiff for online piracy.
The CCI observed that the plaintiff had not refuted the allegations against it and that it would have been counterintuitive for the defendants to provide the plaintiff with the content of Kahaani-2, which was released less than two weeks after the piracy incident. The CCI also observed that film producers have a copyright in the content that they have created and that, under Section 3(5)(i)(a) of the Competition Act, they have the right to take suitable measures to protect this copyright from being illegally exploited in the market. Further, the producers – availing the services of a DCSP as a consumer – had the right to decide which DCSPs would distribute their film.
The CCI therefore held that the defendants' conduct was not unreasonable or anti-competitive and dismissed the case.
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(1) CCI decision, June 21 2017. For the full text please see the CCI website.