CCI again rejects complaint against Warner Bros, 5 others

For the second time in more than a year, Competition Commission of India (CCI) has dismissed K Sera Sera Digital Cinema's allegations of unfair business practices made against firms including Walt Disney, Warner Bros and Fox Star Studios.

It was alleged that these entities indulged in anti- competitive practices in the digital cinema exhibition market.

The complaint was filed against US-based Digital Cinema Initiatives (DCI), Limited Liability Company (LLC), which is a joint venture, and its six stakeholder partners — The Walt Disney Company India, Fox Star Studios, NBC Universal Media Distribution Services, Sony Pictures, Warner Bros and Paramount Films India.

Allegations made by K Sera Sera was first rejected by the Commission in April 2015, following which the complainant approached the Competition Appellate Tribunal.

The tribunal then asked the regulator to reconsider the matter and also examine potential of technical rules in creating anti-competitive conditions and establishing monopolistic conditions.

After looking at the matter again, the regulator has rejected the complaint saying there is no case of competition norms violation.

It was alleged that Digital Cinema has been formed with an object to dominate and monopolise the market of digital cinema exhibition in India and elsewhere.

"Nothing is stated in the information or submitted by the informant which can disclose there exists an agreement amongst opposite parties which can be considered as anti-competitive in terms of Section 3(4) of the Act. The information also does not disclose any case of abuse of dominant position by any of the opposite parties in terms of Section 4 of the Act," the order, dated June 8, said.

Section 3 of Competition Act relates to cartelisation while Section 4 pertains to abuse of dominance.

With regard to alleged collective abuse of dominance by the opposite parties, CCI said, "Since there are no provisions for collective dominance under the Act, the matter need not be assessed on this aspect".

Among others, it was alleged that DCI, LLC is a cartel through which the opposite parties are deciding the price of movie hall tickets by forcing the cinema owners to install expensive DCI-compliant servers and projectors.

The theatre owners are deprived from exhibiting Hollywood movies because of the possession of non-DCI compliant equipment and such restrictions crush the relatively small and technologically independent players in the market, it was alleged.

"Only approximately 5% of the total revenue earned by the Indian film industry were derived from Hollywood movies implying that the informant would not be adversely affected if it is not able to screen the movies of opposite parties," CCI said in its order.