CCI rejects Ajay Devgn's plea against Yash Raj Films

The Competition Commission of India (CCI) has not found any anti-competition practice in Yash Raj Films' (YRF) move of signing exclusive exhibition deals with single screen cinema theaters for its upcoming romantic film Jab Tak Hai Jaan (JTHJ) that is releasing on November 13.

As per CCI, the agreements that YRF entered into in July/August with single screen theatres were not anti-competitive. Ajay Devgn, Bollywood actor and producer of Son od Sardar, had filed petition in the CCI accusing YRF, producer of the Shah Rukh Khan-Katrina Kaif and Anushka Sharma starrer JTHJ, of using it's dominant position in the film industry to secure exclusive deals with single screen exhibitors at the time of its last blockbuster Ek Tha Tiger, ultimately edging Son Of Sardaar out of the competition. Devgn claimed that his film was not finding enough single screen theatres.

In its petition, Ajay Devgn Films, the production house of the actor pointed out that during the release of Salman Khan-starrer 'Ek Tha Tiger', which was release on August 15, YRF and its distributors had taken an undertaking from single screen theatres that they would also exhibit the film 'Jab Tak Hai Jaan' by the same producer during Diwali. It was also laid down that any single screen theatre which did not agree to exhibiting 'Jab Tak hai Jaan' would not get to screen 'Ek Tha Tiger'.

However, after hearing the counsels of both the parties, the Commission said, "The act of booking theatres by a distributor for its two films simultaneously when the theatre owners have the liberty either to agree or not to agree, is not a restraint on the freedom of business of theatre owners. The theatre owners can wait for other films and can refuse to book their theatres simultaneously for two films. Even otherwise, the non significant position held by the single screen theatres does not cause any adverse effect on the competition."

Furthermore under the Act, tie-in arrangements per se are not violating of section 3(4)(a) of the Act, it noted..

Earlier, YRF had said in a statement that it has booked less than 1,500 single screens out of the 10,500-plus single screens available on all-India basis. "When we approached the theatre owners earlier this year, they were more than happy to accommodate Jab Tak Hai Jaan, owing to their long relationship with the production house. No one was forced to include our film in their theatres. Yash Raj Films closed it's distribution deals before the release of it's previous film, Ek Tha Tiger starring Salman Khan. Some theatres who screened Ek Tha Tiger have apparently chosen not to show Jab Tak Hai Jaan at all,” it had said. 

The CCI also observed in its verdict that if many high ticket mega starrer films compete with each other to be released only on the occasion of festivals, the choice lies with the theatres and each theatre is at liberty to book its theatre even in advance and it cannot be said that this had appreciable adverse effect on the market. The subject of appreciability is of huge practical importance for competition.

The CCI also said that Ajay Devgn Films did not place on record data either of market share or of economic strength to show how the opposite parties were dominant in the proposed relevant market on the basis of above stated guiding factors.