By way of an October 3 2017 order, the Competition Commission of India (CCI) dismissed allegations of anti-competitive conduct under Sections 3 and 4 of the Competition Act against the Kerala Film Producers Association and the Film Distributors Association.
Claimant P V Basheer exhibits films in the theatres Liberty Paradise, Liberty Movie House, Liberty Little Paradise and Liberty Suite – all of which are located in Thalassery, Kannur District, Kerala. He is also a member of the Kerala Film Exhibitors Federation.
In a special meeting, it was decided that the revenue-sharing between distributors and exhibitors of Malayalam films would be 60% and 40%, respectively. Basheer alleged that contrary to that understanding, the Film Distributors Association unilaterally changed the revenue-sharing arrangement for air-conditioned theatres and multiplexes operating in shopping malls in the state of Kerala, and increased the revenue sharing to 50% during the first week of release of a film. Subsequently, several distributors that had initially agreed to release films in Basheer's theatres refused to do so on account of an unofficial ban imposed by the defendants.
Basheer claimed that the Film Distributors Association and the Kerala Film Producers Association had conspired to terminate his business financially and oust him from the Malayalam film industry. He argued that the unofficial ban amounted to the actions of a cartel and abuse of a dominant position in violation of Sections 3 and 4 of the Competition Act.
The CCI found no sufficient material on record to suggest that the defendants had enforced a ban on the distribution of films to Basheer for exhibition in his theatres. Therefore, no violation of the Competition Act could be found to have occurred.
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