HT Media, Super Cassettes royalty row takes new turn

In 2011, HT Media alleged that T-Series was charging unreasonable royalties to radio casters for music being played on their radio stations

The legal tussle between HT Media that runs Fever 104 FM radio Channels in Delhi, Mumbai, Bangalore and Kolkata, and Super Cassettes Industries Ltd, which owns T-Series label, on unreasonable royalty charges has taken a new turn.

According to the report of the Director General of the Competition Commission of India (CCI), who was investigating the case, Super Cassettes Industries, which is a dominant enterprise in the relevant market of sale of rights of Bollywood music to private FM radio channels, is “abusing its dominance” by imposing excessive, unfair and discriminatory conditions in the supply of its music in relevant markets which is violation of section 4 of the Competition Act.

In 2011, HT Media had filed a complaint with the Competition Commission of India (CCI) against T-Series alleging that the latter was charging unreasonable royalties to radio casters for music being played on their radio stations.

CCI’s decision on the case will be based on the investigation report that was signed by I.S. Sain, Joint Director General of CCI.

The case was actually based on a petition filed by law firm Amarchand Mangaldas on behalf of HT Media Ltd. It is said that T-Series has about 80% marketshare in rights of Bollywood music of recent times.

HT Media had alleged that T-Series was abusing its dominant position and not following the 2% royalty ruling of the Copyright Board. HT Media had said that the music major was charging the same old rate of Rs 660 per needle hour, which is four times higher than the 2% royalty rate. T-Series had sought an interim order from the Delhi court in 2010 that the rates fixed by the Copyright Board shall not apply to the royalty rates of Super Cassettes Industries Limited.

Neeraj Kalyan, president, T-Series declined to comment saying that the matter is sub-judice. "Let the CCI decide," he said.

The Director General of CCI has also stated in his report that the conditions imposed on radio operators like minimum commitment changes and mandatory payment of performance licence fee by T-Series bear 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.

In his report, the Director General of CCI has also said that Super Cassettes Industries has been charging licence fee, which varies between 1000% to 9000% 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 both upstream level and downstream level to other music providers and radio stations, respectively, as by imposing the condition of minimum committed needle hours of its songs it is distorting the competition in the relevant market. T-Series has not been able to justify its conduct by way of any pro-competitive reasons for imposing these conditions, according to the investigation report, adding that the allegations levelled in the case has been found to be substantiated.