Karnataka Film Chamber of Commerce again found guilty of anti-competitive activities of restricting telecast of films, CCI directed to bring in place ‘Competition Compliance Manual’

Competition Commission of India: It is third time when the CCI found the Karnataka Film Chamber of Commerce (KFCC) in violation of section 3 of the Competition Act, 2002. CCI in the present order imposes penalty on KFCC, Karnataka Television Association (KTVA), and Kannada Film Producers Association (KFPA) for having been involved in the practice of preventing the release/ telecast of dubbed films/ TV-serial in the State of Karnataka.  KFCC was found to be engaged into such anti-competitive activities by CCI in Cinergy Independent Film Services Pvt. Ltd v. Telangana Telugu Film Distributors Association, 2013 CCI 23; and in Reliance Big Entertainment v. KFCC, Case No. 25/2010.

It may be noted that the issue of restriction imposed by the associations on the dubbed version of TV serials has been declared anticompetitive by the Commission in a similar case involving West Bengal film and television industry.  In  Sajjan Khaitan v Eastern India Motion Picture Association, the Commission had opined that the act and conduct of the film associations is anti-competitive in nature if it imposes restrictions on the free and unrestricted distribution and exhibition of non-Bengali TV serials dubbed in Bengali language. Such act and conduct was held to be limiting and controlling the supply of serials dubbed in Bengali language in violation of provisions of section 3(3) (b) of the Act.

In the present case the competition regulator viewed that KFCC as an association is guilty of carrying on the practices of prohibiting/banning dubbed content in the form of films in the State of Karnataka; and KTVA as an association is guilty of on the practices of prohibiting/banning dubbed content in the form of TV serials.  KFPA is found guilty of participating in the anti-competitive decision making practices and implementing such decisions by boycotting the cinema theatres who do not obey their decisions in the State of Karnataka. The conduct of these associations, therefore, falls under the purview of section 3(3) (b) of the Act which raises a presumption of appreciable adverse effect on competition.

The Commission rejected the plea that the associations are putting such restriction to preserve and promote the Kannada language. It is opined by the Commission that in absence of any statutory restriction of such nature, it is the viewer who should have the choice to watch a dubbed programme or original language programme or any other programme. Trade associations cannot become the self-appointed guardians of local language and culture and interfere with the market forces.

Other then imposition of penalty and other usual directions, the competition watchdog in its present order exercising its powers under 27(g) of the Act, directed the guilty associations to bring in place, in letter and in spirit, “Competition Compliance Manual’ to educate its members about the basic tenets of competition law principles. These erring associations should play an active role in creating awareness amongst its members of the provisions of the Act through competition advocacy. Kannada Grahakara Koota v. Karnataka Film Chamber of Commerce, 2015 CCI 18, decided on 27-07-2015

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