Agreements which limit or control production, supply, markets, technical development, investments or provision of services are presumed to have an appreciable adverse effect on competition and are prohibited under Section 3(1) of the Act.

ORDER :

1. Karnataka Film Chamber of Commerce (KFCC), the Appellant in this case is aggrieved by the order dated 27.7.2015 of the Competition Commission of India (hereafter referred to as, ‘the Commission’) passed under Section 27 of the Competition Act, 2002 (for short, ‘the Act’). The Commission found that the conduct of the Appellant, the Karnataka Television Association (KTVA) and the Kannada Film Producers Association (KFPA) resulted in limiting and restricting the market of dubbed films/serials in Kannada language and was in contravention of Section 3(1) read with Section 3(3)(b) of the Act. The Commission directed the Appellant, KTVA and KFPA to cease and desist from indulging in practices found to be anti-competitive and to bring out a Competition Compliance Manual to educate their members about the competition law principles and play an active role in creating awareness among their members of the provisions of the Act through competition advocacy. Further, a penalty of Rs. 16,82,204 was imposed on the Appellant. Penalty of Rs. 1,74,293 and Rs. 1,68,124 was imposed on KTVA and KFPA respectively.

2. The Appellant is an association of film producers, distributors and theatre owners. It is registered as a non-profit society under the Karnataka Societies Registration Act, 1960. The facts of the case are that, Kannada Grahakara Koota (Respondent No. 1) and Shri Ganesh Chetan (Respondent No. 2) had filed information in terms of Section 19(1)(a) of the Act alleging anti-competitive practices and cartelization within the Karnataka Film and television industry. The information was filed against the Appellant, KTVA, KFPA, Karnataka Film Directors Association (KFDA), Karnataka Chalanachitra Academy (KCA) and Karnataka Film Artists, Workers and Technicians Union (KFAWTU). The thrust of the Informants’ allegation was that the market of films and television shows within the State of Karnataka was restricted due to the collective action of these associations, prohibiting telecasting of dubbed content from any other language into Kannada, and banning making, releasing and exhibiting of dubbed films. Specific instances of alleged blocking of telecast of dubbed TV serials “Satyameva Jayate” and Rani Laxmibai of Jhansi and exhibition of film “Koffi Shop”, were cited in this context.

3. The Commission was of the opinion that, there existed a prima facie case and vide its order dated 18.10.2012 directed the Director General (DG) to cause an investigation to be made into the matter. The DG submitted its investigation report dated 29.4.2013 with the conclusion that the Appellant, KTVA and KFPA had indulged in anti-competitive conduct by putting restrictions on the production and exhibition of dubbed version of films/TV programmes of non-Kannada language, in contravention of Section 3(1) and Section 3(3)(b) of the Act. The DG was of the view that, the activities of other associations were not within the purview of Section 3(3) of the Act as these were not the associations of enterprises engaged in the production and exhibition/telecast of films or TV programmes.

4. Since KFCC is the Appellant before us, we are, in this order, limiting our analysis to the factual and legal issues pertaining to the conduct of KFCC.

5. The specific findings of the DG, in so far as these concern the Appellant, were as follow:

(i) The films and TV programmes were interchangeable in character as most of the persons engaged in the films were also engaged in the TV programmes and the process of producing films and TV programmes was similar and only the medium of exhibition made them different in nature. The claim of the Appellant that the films and TV programmes were different markets was not acceptable. The rules/regulations and market conditions for carrying out the business of film/TV production and exhibition were different in Karnataka from the other states, making Karnataka a different geographical market. The relevant market for the purpose of investigation, therefo