Competition Commission orders probe against Star India

Fair trade regulator CCI today ordered a probe against Star India and its officials for alleged abuse of dominant position in broadcasting services market in Kerala, following a complaint by a state-based cable operator.
The order follows a complaint about "alleged anticompetitive behaviour and abuse of dominant position" by Star India in charging excessive licence fee from Thiruvananthapuram Entertainment Network (P) Ltd, as compared to fees charged from the bigger cable operators of the state.
Star India has denied all the allegations.
Asking its Director General to conduct a detailed probe, the Competition Commission of India (CCI) said its examination so far "prima facie indicates" that Star India is acting in contravention of certain provisions of the Competition Act, relating to abuse of dominance.

The DG has been asked to complete the investigation within 60 days and submit its report to CCI, while also investigating the role of individuals and officials of Star India "who might have been in-charge of and responsible for the conduct of the business" at the time of the alleged contravention.
As per the CCI order, Thiruvananthapuram Entertainment Network (P) Ltd has been in business for 15 years and supplies signals for telecast of various TV channels including those of Star TV to around 22,000 customers in Kerala.

The informant deposed before CCI that it has to enter into agreements with Star India from time to time whereby it is given a bouquet of channels for monetary consideration, which is enhanced periodically.

It has been alleged that such agreements entered into by Star India with various TV channel distributors including the the complainant, "are anti-competitive in nature in as much as the Opposite Party (Star India), over a period of time, started showing price discrimination and started asking for more money for its bouquet of channels which were being provided by the Opposite Party to various competitors of the Informant for lesser prices."
It further said that till 2014, the rates being charged by Star India from the complainant as well as its bigger competitors including Kerala Communicators Cable Limited, Asianet Cable Vision and DEN Networks were more or less uniform.

However, after Star India took over the Malayalam channels owned by Asianet on June 30, 2014, it started charging a hefty licence fee from the complainant for subscription of its channels, as compared with the fee charged from the bigger players.
"It is alleged that such disparity is shown by the Opposite Party with the intention of eliminating small-scale broadcasters from the State of Kerala and creating monopoly of only big players like KCCL, ACV and DEN," as per the CCI order.
CCI said it had asked Star India to provide certain information regarding its competitors in Kerala and their respective market shares.

"In response to the same, the Opposite Party, rather than providing the specific information sought, merely submitted that the broadcasting industry in India is highly competitive with the presence of around 881 private TV channels registered with the Ministry of Information and Broadcasting and the Opposite Party competes with all of them which are broadcasted in the State of Kerala," CCI said.
CCI further said it therefore obtained information from the public domain and observed that Star India "seems to be in a position of dominance in relevant market for provision of broadcasting services in the State of Kerala".
The regulator also sought additional information from the complainant regarding the actual rates charged by Star India, after which it sought to withdraw the complaint saying its disputes "stood resolved and the Opposite Party had agreed to re-consider the tariff rates as per the total number of connections of the Informant".

The CCI, however, observed that the alleged contravention by Star India "was being assessed and inquired into not only from the perspective of the Informant, but also from the perspective of its abuse of dominance in the market in general".
Accordingly, it said, a settlement cannot be the basis for termination of any proceedings and rejected the request for withdrawal of the complaint.