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20 July 2017
By way of an April 10 2017 order, the Competition Appellate Tribunal (COMPAT) upheld a July 27 2015 Competition Commission of India (CCI) order, which found that the conduct of the Karnataka Film Chamber of Commerce (KFCC) and other associations had resulted in limitation and restriction of the market of dubbed films and television shows in the Kannada language, thereby violating Sections 3(1) and (3)(b) of the Competition Act.(1) The CCI imposed a penalty of Rs1,682,204 on the KFCC.
Information filed by Kannada Grahakara Koota alleged that the market of films and television shows in the state of Karnataka was restricted due to the collective action of the associations, including KFCC, which prohibited the broadcast of content dubbed from any language into Kannada and banned the production, release and exhibition of dubbed films. According to the informant, specific instances of the alleged blocking of broadcast included the dubbed television shows Satyameva Jayate and Rani Laxmibai of Jhansi, and the film Koffi Shop. The CCI ordered a detailed investigation into the matter.
The director general reported that the KFCC and other associations had indulged in anti-competitive conduct by restricting the production and exhibition of dubbed versions of non-Kannada films and televisions shows, which violated Sections 3(1) and (3)(b) of the Competition Act.
The CCI considered the director general's report and noted the fact that restrictions imposed on dubbed television shows had been declared anti-competitive in a similar case involving the West Bengal film and television industry (CCI Case 16/2011). The CCI was of the view that the KFCC's decisions and practices fell within the scope of agreements pursuant to Sections 3(1) and (3)(b) of the Competition Act, which raise the presumption of appreciable adverse effect on competition. The CCI agreed with the director general and found that the KFCC had violated these sections of the act.
In response to the KFCC's appeal against the CCI order, COMPAT was of the view that any action taken by the KFCC was a joint action of and among its members, thereby constituting an agreement entered into, practice carried on or decision taken by which the KFCC could be subject to appraisal under Section 3 of the Competition Act. Citing a 2014 Supreme Court decision (Appeal 6691), COMPAT held that the issue of whether the agreement, practice or decision to restrain dubbed content by the association violates Section 3 of the act is not res integra (an untouched matter). Similarly, once the agreement fell within the purview of Section 3(3), appreciable adverse effect on competition is presumed. The appeal was therefore dismissed.
For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4249 2525) or email (email@example.com). The Vaish Associates website can be accessed at www.vaishlaw.com.
(1) COMPAT order dated April 10 2017. For full text see www.cci.gov.in.
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Man Mohan Sharma