Case No. 57 of 2016. Case: Eskay Video Pvt. Ltd. Vs Real Image Media Technologies Pvt. Ltd. and Ors.. Competition Commision of India

Case NumberCase No. 57 of 2016
CounselFor Appellant: Bunmeet Singh, Advocate and For Respondents: Bharat Budholia, Aishwarya Gopalakrishnan, Kaustav Kundu, Ruchi Verma, Advocates and Harsh Rohatgi, President
JudgesG.P. Mittal, J. (Member), Devender Kumar Sikri, Chairperson, S.L. Bunker, Sudhir Mital, Augustine Peter and U.C. Nahta, Members
IssueCompetition Act, 2002 - Sections 19(1)(a), 26(2), 3, 4
Judgement DateDecember 06, 2016
CourtCompetition Commision of India


Order under Section 26(2) of the Competition Act, 2002

  1. The information in the instant matter was filed by Eskay Video Pvt. Ltd. ('Informant') under Section 19(1)(a) of the Competition Act, 2002 (the 'Act') against Real Image Media Technologies Pvt. Ltd. ('OP 1'), Shree Venkatesh Films Pvt. Ltd. ('OP 2'), UFO Moviez India Ltd. ('OP 3'), and Arti Cinemas Pvt. Ltd. ('OP 4') [collectively, hereinafter, 'OPs'] alleging contravention of provisions of Sections 3 and 4 of the Act.

  2. As per the information, OP 1 and OP 3 are manufacturing Digital Projection Systems (DPS), which are used for projection of films in cinema halls, under the brand names 'Qube' and 'UFO' respectively. OP 2 is the sole distributor of 'Qube' brand of DPS and OP 4 is the sole distributor of 'UFO' brand of DPS in the state of West Bengal (WB). The Informant is the distributor of 'UMW' brand of DPS in WB, which is being manufactured by M/s. United Media Works Pvt. Ltd.

  3. As per the information, 450 cinema halls in WB are using DPS and they are fully dependent on the DPS manufacturers and distributors for installation and connection in order to exhibit films in their theatres. The exhibitors have to get DPS along with the connection from the concerned distributor of DPS manufacturer. The Informant has alleged that although it is theoretically possible for an exhibitor/cinema hall owner to have more than one DPS for projection of different films at different times of the day, but the OPs through their anti-competitive practices are preventing this. It is stated that before the entry of the Informant, there were only two distributors of DPS in WB viz. OP 2 and OP 4 who controlled the entire market. It is averred that the cinema halls in WB are not able to avail the services of any other DPS manufacturer/distributor from outside the state because of the distributorship agreement that exists between OP 1 and OP 3 with their respective distributors in different states.

  4. It is further averred that OP 2 and OP 4, by virtue of their internal arrangement, do not permit a cinema hall to have more than one DPS i.e. the cinema halls have to choose between 'Qube' and 'UFO' brands of DPS. The Informant has submitted that each cinema hall owner/exhibitor has to enter into an agreement with OP 2 and OP 4 for a fixed period of time with virtually no exit option. It is also stated that the rates and terms contained in the agreements of OP 2 and OP 4 are same or substantially the same. Some of such terms include exclusive right being given by the exhibitor to the concerned service provider for exhibition of films at cinema hall; OP 2 or OP 4 being given exclusive rights for on screen advertisements including film shots, slice, trailers, etc.; having a fixed term of five years within which an exhibitor is not entitled to terminate the agreement save and except when OP 2 or OP 4 default in payment of advertisement revenue to the exhibitor; in the event, a cinema hall owner increases the...

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