1. Background

1.1 A number of cases have been filed under the provisions of section 19(1) (a) of the Competition Act, 2002 (Act) alleging certain anti-competitive acts on the part of Karnataka Film Chamber of Commerce (KFCC) and other film bodies/associations which are associated with the business of film distribution and exhibition in the territories under their control in India. The present order relates to case nos. 25, 41, 45, 47, 48, 50, 58 and 69 of 2010 in which information has been filed by various Informants against these associations. While in case no. 25, Karnataka Film Chamber of Commerce (KFCC) and Bihar and Jharkhand Motion Pictures Association (BJMPA) are among ten other respondents, KFCC happens to be the sole respondent in case nos. 41, 45, 47, 48 and BJMPA, the sole respondent in case nos. 50, 58 and 69.

1.2 In all these cases, the basic issues raised by the Informants are common and identical. It has been alleged that these film bodies/associations have indulged in various anti-competitive activities in violation of the provisions of sections 3 and 4 of the Act viz; asking the producers-distributors to compulsorily register their films with them, forcing them to abide by their unfair and discriminatory rules, directing their members not to deal with the non-members, putting restrictions such as limit on the number of cinema theatres for exhibition of films, discriminating non-regional films against the regional films, undue long holdback period for satellite, DTH and other rights in respect of exhibition of films and imposing bans penalties and giving a call of boycott against those who violate the rules and regulations of the associations.

1.3 In addition to the aforesaid issues, the Informants also pleaded for interim orders under section 33 of the Act in these cases in order to secure release of their films free from any fetters.

1.4 Since the issues in all these eight cases are almost common and identical, the Commission has decided to dispose of these cases in one common order.

Background and Profile of the parties

1.5 In India, majority of the films are produced in Hindi language. Tamil, Telegu, Bengali, Kannada and Malayalam are the major languages in which the non-Hindi films are made. The business of film making consists of various stages involving pre-production, production, post-production, distribution and exhibition. The activities pertaining to distribution and exhibition constitute the final end points in the entire value chain of film production and exhibition. A distributor acquires distribution rights from the producer of a film and thereafter recovers his costs from the revenues earned through exhibition of that film. Now-a-days, many producers are also performing the role of distributors, who prefer to distribute their own films.

1.6 For the purposes of assignment of film distribution rights, territory of entire India at present is broadly divided into 12 circuits, in each of these circuits, associations of film distributors and exhibitors have generally been formed either under section 25 of the Companies Act, 1956 or under the Societies Registration Act, 1860. These associations regulate the business of film distribution and exhibition in their area of control and have their own Memorandum and Articles of Association. In addition, rules and regulations to regulate the activities of film distribution and exhibition have also been framed by them. These associations mainly consist of the persons engaged in the business of film distribution and exhibition. However, some of the associations also have the producers as their members.

1.7 A brief profile of such associations who have been named in the eight cases under consideration is given below;

Profile of Respondents

(A) Karnataka Film Chamber of Commerce (OP-1 in case no. 25 and sole opposite party in case nos. 41, 45, 47 and 48)

1.8.1 Karnataka Film Chamber of Commerce (KFCC) is an association of film producers, distributors and theatre owners