Investigation directed into alleged unfair business practices against Warner Bros, Walt Disney, Fox Star Studios and 4 other entities

Competition Appellate Tribunal (COMPAT): “In times where technology is proving to be a guiding factor in evolution and definition of markets, there is no doubt that more and more cases will come before Competition authorities where technology would play a significant role in creating competitive environment. Many a times from the face of a proposition, it might appear restrictive and anti competitive unless examined in depth. It is also important that such proposition is examined in a broader context of stake holder perception because that is what would help in validating claims and counter claims as well as in assessing what fulfills the criteria of consumer welfare,” observed COMPAT while setting aside the order of Competition Commission of India (CCI) rejecting a complaint of alleged unfair business practices made against Warner Bros, Walt Disney, Fox Star Studios and four other entities and further directing the Director General to conduct investigation into the allegations contained in the information.

The seven entities are US-based Digital Cinemas Initiatives LLC, 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. The order of COMPAT was pronounced while hearing an appeal filed by K Sera Sera Digital Cinema. The matter had bounced back before COMPAT by virtue of the order of CCI vide which a complaint filed by K Sera Sera Digital Cinema against the seven entities was rejected on the ground that there was no prima-facie violation of competition norms by the entities. In its complaint before CCI, K Sera Sera Digital Cinema had alleged that since the seven entities had dominance in production of Hollywood films, they were abusing their dominance by mandating release of their films only through use of Digital cinema technology. The Tribunal had remitted the matter back to the Commission to examine potential of technical rules in creating anti-competitive conditions and establishing monopolistic conditions. Again the matter was rejected by the CCI.

After perusal of material on record, COMPAT noted that CCI committed serious error by declining to order an investigation as it would have saved time and efforts of all those involved in this matter if the Commission had ordered an investigation by the director general instead of once again more or less reiterating its earlier views. While ordering an investigation in the matter, the Tribunal directed that the investigation shall be conducted in accordance with the provisions contained in the Competition Commission of India (General) Regulations, 2009. [K Sera Sera Digital Cinema Pvt. Ltd. v. Digital Cinema Initiatives, 2016 SCC OnLine Comp AT 399 , decided on November 9, 2016]

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