Competition Commission slaps penalty on Kerala’s film distribution body

Monday, Jan 5, 2015,22:25 IST By metrovaartha A A A

New Delhi | Competition Commission has slapped a penalty of over Rs 75,315 on Kerala’s Film Distributors Association for engaging in unfair business practices with respect to price for distribution of films in the state. The association has also been directed by CCI to cease and desist from indulging in anti competitive acts. Besides, the fair trade regulator said it would issue a separate ruling on the executive committee and office bearers of the film body who were found to have violated competition norms, in the case.
The case relates to a complaint by Cinemax India Ltd (now known as PVR Ltd) alleging that Film Distributors Association (Kerala) abused its dominant position by seeking to impose unfair, unreasonable and inadequate revenue share terms. It was also alleged that members of the association acted in concerted manner to decide the rates at which Malayalam films would be provided for exhibition. Further, it was charged that Executive Committee of the body took decision for enhancing or revising the revenue share and each individual member would be required to follow the same, irrespective of individual choice.
Based on a detailed probe by its investigation arm the Director General the Competition Commission of India (CCI) in an order released today said that impugned acts/conduct of Film Distributors Association (Kerala) is found to be in contravention of the provisions of… the Act. The Commission said the association by its impugned conduct fixed the price for distribution/exhibition of films in Kerala and forced the Informant to accept such terms and conditions.
Further, the opposite party being the single largest association of distributors in Kerala has thereby controlled and regulated the market of film distribution/ exhibition, the fair trade regulator noted. Accordingly, CCI imposed penalty on the association computed on 5 per cent of the average turnover of the last three years which amounts to Rs 75,315. On the issue of individual liability of personsincharge of the body, CCI noted that the probe report furnished a list of 38 persons responsible as they were found to attend the meetings of the association wherein the issues pertaining to the impugned revenue sharing pattern in respect of multiplexes was discussed.
These are essentially the members of Executive Committee of the association and its office bearers who attended the meetings where the impugned decisions were taken, CCI said. The Association’s mandate is to promote proper distribution of feature films in Kerala and to safeguard the interests of film distributors, who are its members. The Commission noted that the grouping comprises of almost all the distributors (221 distributors are the members of the association) and that there are only 20 other distributors who are not members.