CCI probe backs HT Media plaint against T-Series

In 2011, HT Media had moved CCI against T-Series alleging that the latter was charging unreasonable royalties to radio casters

An investigative report of the Competition Commission of India has upheld a complaint of unreasonable royalty charges filed by HT Media Ltd, which runs the Fever 104 FM radio channels in Delhi, Mumbai, Bangalore and Kolkata, against Super Cassettes Industries Ltd (SCIL), which owns the T-Series label.

According to the office of the director general (investigation) of the Competition Commission of India (CCI), which investigated the case, SCIL, a dominant enterprise in the relevant market of sale of rights of Bollywood music to private FM radio channels, was “abusing its dominance” by imposing excessive, unfair and discriminatory conditions in the supply of its music in relevant markets — a breach of section 4 of the Competition Act.

In 2011, HT Media (HTM) had filed a complaint with CCI against T-Series, alleging the latter was charging unreasonable royalties to radio casters for music being played on their stations. The petition was filed by law firm Amarchand Mangaldas on behalf of HTM. It is said that T-Series has about 80 per cent market share in the rights of Bollywood music of recent times. HTM had alleged T-Series was abusing its dominant position and not following the two per cent royalty ruling of the Copyright Board. It had said the music major was charging the same old rate of Rs 660 per needle hour, four times higher than the two per cent rate.

Neeraj Kalyan, president, T-Series, declined to comment, saying the the matter was sub judice. “Let CCI decide,” he said.

The DG’s report says the conditions imposed on radio operators, such as minimum commitment changes and mandatory payment of performance licence fee by T-Series bore no relation to the actual quantity of T-Series music broadcast by the FM channels and, thus, amounts to imposition of an unfair and discriminatory condition, in violation of Section 4(2)(a)(i) and 4(2)(a)(ii) of the Competition Act.

And, that SCIL has been charging a licence fee of 1,000-9,000 per cent of the rates determined by the Copyright Board to be reasonable for the same category of goods.

The conduct of T-Series also forecloses the market at upstream and downstream levels to other music providers and radio stations, as by imposing the condition of minimum committed needle hours of its songs, it is distorting the competition in the relevant market, says the report.

T-Series has not been able to justify its conduct by way of any pro-competitive reasons for imposing these conditions, according to the report, adding the allegations levelled were found to be substantiated.