CCI Verdict: State Associations Will Have To Make Amends

UTV Software Communications, Reliance Big Entertainment Ltd., Eros International and FICCI Multiplex Association of India have been granted a relief by CCI (Competition Commission of India) on laws which restricted production houses with unreasonable hold backs for all other rights outside theatrical rights. The CCI has also imposed a penalty of more than Rs. 46 lakh on seven trade associations.

In 2010, UTV had filed a case against distributor associations like KFCC (Karnataka Film Chamber of Commerce) for putting a restriction on the number of cinemas to release a non-Kannada film and BJMPA (Bihar and Jharkhand Motion Pictures Association) for demanding unreasonable hold backs for registering its films. It barred studios from exploiting satellite and home video rights in the respective regions and compelled the studio to register films with the trade body and bend to their archaic rules. As a result, this constrained the market access of the studio for unfettered distribution of its films on non theatrical platforms.

The CCI ruled that the anti-competitive behaviour of any entity needs to be condemned heavily for effective function of the market. It added that the associations are taking decisions and engaging in practices which are anti-competitive. Consequently, in Feb 2012, the CCI has imposed a hefty penalty on these distributor associations; to be deposited with immediate effect to the commission. The order clarifies that the associations will have to stop (a) Compelling the producers/distributors/ exhibitors to become their members as a pre-condition for exhibition in their territories; (b) Discrimination between regional and non-regional films and imposing discriminatory conditions against non-regional films; (c) Screen restrictions based on language or manner of exhibition of a film to be done away with; (d) Holdbacks on satellite and home video, with studios are free to decide such holdbacks; (e) Compulsory registration of films as pre-condition to release to be done away with.

Siddharth Roy Kapur CEO, UTV Motion Pictures said, “This judgement by the CCI will stand out as a landmark event in the history of the Indian film industry. It unshackles producers and distributors from the draconian and archaic bylaws of defunct associations, driven by vested interests.”

Apart from KFCC and BJMPA, Reliance, Eros and FICCI-MAI had filed complaints against other associations. The other trade associations which will be affected by this combined order are Eastern India Motion Picture Association, Central Circuit Cine Association (Amravati, Jaipur and Indore), Hyderabad State Film Chamber of Commerce, Northern India Motion Pictures Association, Indian Motion Pictures Distributors Association, Orissa Film Distributors Syndicate and The Chennai Kanchipuram Thiruvallur District Films Distributors Association.