Case No. 58 of 2012. Case: Kannada Grahakara Koota and Ors. Vs Karnataka Film Chamber of Commerce (KFCC) and Ors.. Competition Commision of India

Case NumberCase No. 58 of 2012
CounselFor Appellant: Aniruddha Deshmukh, Advocate and For Respondents: Shwetha Shanmughappa and K. Harshavardhan, Advocates
JudgesAshok Chawla, Chairperson, S.L. Bunker, Sudhir Mital, Augustine Peter and U.C. Nahta, Members
IssueCompetition Act, 2002 - Sections 19(1)(a), 26(3), 27, 3, 3(1), 3(3), 3(3)(b), 4; Constitution Of India - Article 19
Judgement DateJuly 27, 2015
CourtCompetition Commision of India


  1. The present order will dispose of the case that initiated from the information filed by Kannada Grahakara Koota (hereinafter, the 'Informant 1') and Shri Ganesh Chetan (hereinafter, the 'Informant 2') (collectively referred to as the 'Informants') under section 19(1)(a) of the Competition Act, 2002 ('the Act') against Karnataka Film Chamber of Commerce (KFCC) (hereinafter, 'Opposite Party 1/OP-1'), Karnataka Television Association (KTVA) (hereinafter, 'Opposite Party 2/OP-2'), Karnataka Film Directors Association (KFDA) (hereinafter, 'Opposite Party 3/OP-3'), Kannada Film Producers Association (KFPA) (hereinafter, 'Opposite Party 4/OP-4'), Kannada Chalanachitra Academy (KCA) (hereinafter, 'Opposite Party 5/OP-5'), and Karnataka Film Artists, Workers and Technicians Union (KFAWTU) (hereinafter, 'Opposite Party 6/OP-6') (collectively referred to as the Opposite Parties) alleging inter alia contravention of the provisions of section 3 of the Act.

  2. Brief facts and allegations:

    2.1 The Informant No. 1 is an association of viewers within the State of Karnataka and the Informant No. 2 is its President. The Opposite Parties are the various trade associations whose members are inter-alia engaged in the business of films and TV serials exhibition, production and distribution etc.

    2.2 The Informants have alleged that they have, at various times in the past five years, been deprived of viewing various shows/films by the Opposite Parties that were produced in a language other than Kannada. The case primarily pertains to allegations regarding anti-competitive operations and abuse of dominant position by the Opposite Parties in not allowing the release and broadcast of any dubbed content, within the State of Karnataka. OP-1 has been alleged to control a large portion of the Karnataka film industry and is stated to have considerable control over the players in that industry. As per the allegations, it refuses to deal with those who do not follow its directions and mandates which are alleged to be anti-competitive. The directions, inter alia, restrict the exhibition of non-regional films, debar non-members to release films, withhold the payment of distributors' share for non-compliance of its directions etc. As per the allegations, OP-2 pressurizes different TV channels not to telecast dubbed content which results in competition distortion and denial of consumer choice. The other opposite parties likewise have been alleged to be indulging in anti-competitive conduct.

    2.3 The Informants have contended that the following programmes/films which were telecasted/dubbed in Kannada were not permitted by the Opposite Parties to be released on TV channels/theatres in Karnataka:-

    2.4 Therefore, the Informants, aggrieved by the anti-competitive activities of the Opposite Parties, approached the Commission to initiate inquiry against the Opposite Parties under the provisions of the Act. The Commission prima facie found merit in the allegations of the Informants and, accordingly, vide its order dated 18.10.2012, directed the Director General (hereinafter referred to as the 'DG') to investigate the matter for contravention of the provisions of the Act.

  3. DG's Investigation and Findings

    3.1 In terms of section 26(3) of the Act, the DG submitted a detailed investigation report in the matter to the Commission on 29.04.2013.

    3.2 In line with the facts and circumstances of the case, the DG looked into the conduct of the Opposite Parties. The DG analysed whether the Opposite Parties have put restriction on the dubbed version of other language films/TV programs and whether the activities and conduct of the Opposite Parties are in violation of the provisions of Section 3(3) of the Act or not.

    3.3 The DG looked into the nature and working of each Opposite Party. As per the DG report, OP-1, OP-2 and OP-4 are the association of enterprises who are engaged in the production and exhibition/telecast of films and TV programs. The DG found concrete evidence against OP-1 and OP-2 which showed that they were prohibiting/banning the telecast of dubbed content, both films and television programmes, on television. OP-4, which is a Producer's association in the state of Karnataka, was found by the DG to be jointly responsible for the decisions of OP-1. The office bearers/members of OP-4 were reported to be members of OP-1 also.

    3.4 With regard to OP-3, an association of directors who are engaged in the direction of Kannada films, the DG has opined that its role is limited to the needs of film directors only and as such DG has found no evidence against it while investigating the facts of the present case. Similarly, OP-6, a trade union of cine employees/artistes was found to be mainly concerned with the welfare of its members and to represent them before the film producers and as such the DG has found no evidence against it while investigating the facts of the present case. OP-5, was found to be a Government organisation established with the objective to act as a bridge between the Karnataka Government and Film Medium. The DG found no evidence against OP-5 for the contravention of the Act in the present case.

    3.5 The findings of the DG and the supporting evidence against OP-1, OP-2 and OP-4 are summarized in the following paragraphs.

    3.6 For the purposes of investigation, the DG has delineated the relevant market as the 'production and exhibition/telecast of Films and TV programs in the State of Karnataka'. The DG has noted that OP-1, OP-2 and OP-4 are associations of producers/distributors/exhibitors/artists and professionals engaged in the business of production and exhibition/telecast of television programs and films in Karnataka. The joint efforts of all the persons associated with the Opposite Parties culminate in a single end product i.e. a visual film in the form of feature film or television serial or any other programme such as documentary etc. Thus, the DG has opined that for the purposes of the present case, the members of Opposite Party associations are dealing in identical or similar trade i.e. production and exhibition/telecast of films and TV programs.

    3.7 The DG has then individually looked into the conduct of each of these Opposite Parties. As per the DG report, although the bye-laws of the OP associations, OP-1 and OP-2, do not contain restriction on other language films or programs, they have been following the practice of opposing dubbed films in the name of protection of Kannada language or Kannada film/TV industry by way of taking joint decisions.

    3.8 DG has also reported that the history of ban on dubbing of films in Kannada may be traced back to late fifties and early sixties. In 1962 the local film makers under the banner of 'Sahitya Parishath' (an organisation for the development of Kannada culture and language) declared a ban on dubbed films in Karnataka. After this declaration, reportedly no dubbed film has been released in Karnataka. This declaration has been adopted under the banner of various film trade associations, including OP-1. In the recent past, after the formation of KTVA in 2000, the responsibility of restricting dubbed TV programme has been spearheaded by KTVA alongwith KFCC and other associations.

    3.9 The DG has noted that OP-1 is the most important organisation in the film industry of Karnataka which is recognised as the representative of the entire Kannada film Industry even by the government bodies like Film Certification and Censor Board, Karnataka State Information Department etc. The activities like title registration, publicity clearance and certificates of Kannada movie for tax exemptions are generally granted by these bodies on the recommendations of OP-1 only.

    3.10 DG has further reported that, due to market power and strength of OP-1, it is almost impossible to carry out the business of film production, distribution and exhibition in the state of Karnataka by not following the decisions of OP-1. The DG has noted that there are various essential regulatory practices performed by OP-1 like routine certificates required by different stakeholders that makes them highly dependent upon OP-1.

    3.11 The DG has also found that OP-1 has been engaged in restricting the screening of films by taking anti-competitive decisions.

    3.12 The DG took into consideration the investigation in earlier cases against OP-1 wherein it was found that OP-1 had imposed restriction on the distribution and exhibition of dubbed films in Kannada language. Further, the Annual report published by film Censor Board revealed that no film has been dubbed in last many years. Further, the data reveals that dubbing of films is prevalent in all other Indian languages, whereas no film either Indian or foreign has been dubbed in Kannada language. The DG has thus concluded that the practice of restricting the dubbing of films has been followed by the local producers and artistes under the banner of OP-1 since last many years.

    3.13 Apart from the above mentioned past conduct, the DG also found that OP-1 tried to restrict the release of film 'Koffi Shop' produced and directed by Shri Geetha Krishna. The DG inquired into the said fact from Shri Geetha Krishna. In reply to DG's office notice, Shri Geetha Krishna has stated that in spite of his film 'Koffi Shop' being a straight film, OP-1 had interfered in the release the film in Karnataka alleging that it is a dubbed film. He has further submitted that his film was met with a series of demonstrations and protests which were covered by the media. Further, in spite of a court order to the film body not to interfere with the release of the film, Zee TV, which had bought the telecast rights of the film, informed Mr. Geetha Krishna that OP-1 had asked the TV channel not to air the film. He has also stated that a couple of newspapers, heavily dependent on film advertisement, were threatened not to carry advertisements by the producers of films opposed by OP-1. The DG took into account the...

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