CCI: Producers are consumers of availing digital cinema and therefore have right to choose digital cinema provider

Competition Commission of India: In a recent case, the Competition Commission of India held that the “producer of a movie/ content manufacturer, availing the services of digital cinema providers as a consumer, has the right to decide the digital cinema service providers of its choice to distribute its movies”.

The Informant (K Sera Sera) alleged that the producers had entered into this “anti-competitive arrangement/ agreement” with a view to limit/ control the release of movie Kahaani 2. It also contended that the Producer had refused to supply the content of movie Kahaani 2 and had also directed distributors across India not to accept movie order from the theatres associated with the informant.

The Producer enclosed copy of news article regarding an FIR filed against the informant for online piracy. The Commission observed that the Producer released 5 movies last year, out of which 3 copies were given to the informant, 1 was not asked by the Informant and the 5th (Kahaani 2) was not given due to fear of piracy.

The Commission also observed that “Section 3(5)(i)(a) of the Act clearly provides that application of Section 3 shall not restrict the right of any person to impose reasonable conditions as may be necessary for protecting any of its rights conferred upon under the Copyright Act, 1957.” Therefore, ruling in favour of the producers of movie Kahaani 2, the Competition Commission of India held that there was no contravention of Sections 3 & 4 of the Competition Act, 2002. [In re K Sera Sera Digital Cinema Ltd, 2017 SCC OnLine CCI 31, decided on 21.06.2017]

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