1. Introductory

1.1 The Indian Film Industry is one of the oldest segments of Indian entertainment industry. Films constitute about 27% of the entertainment industry in India. The film industry was given status of industry in the year 2000. In recent years, the Indian film industry has witnessed marked improvements on all fronts, viz., technology, themes, exhibitions, finances, marketing and business environment. Indian film industry is also getting corporatized. FDI in all film related activities such as film production, distribution, exhibition, marketing etc. is permitted up to 100% for all companies under the automatic route. The combined revenues of the Indian film industry, including box office and ancillary revenues, are estimated to have reached a figure of around Rs.109.2bn in the year 2009. The industry is estimated to grow at a compound annual growth rate of 9.1% to reach $3.4bn (Rs. 168.6 bn) by 2013 due to factors such as the expansion of multiplex screens, enhanced penetration of home video and increase in the number of film based TV channels fuelling demand for film content. (Source : Report of FICCI - KPMG, 2009)

1.2 One of the major reasons for a large number of films being produced and released is stated to be the proliferation of quality film exhibition infrastructure through multiplexes since 2001. Development of multiplexes has in fact revived the lifestyle of theater going, which had taken a hit during the previous decade or more due to proliferation of TV channels and affordable home viewing apparatus such as VCD/DVD players and computers. Increased cinema attendance and gross box office collections, thus, improved the business economics across the film value chain. Factors like rising consumerism, increase in disposable income, favourable demographics, lower penetration of multiplexes within the country and boom in retail sector throw up excellent opportunities for the multiplex sector in India. The multiplex business segment is, however, still in its nascent stage of growth. This is the reason multiplexes have mushroomed in many parts of the country over the past few years.

1.3 Film production entities are becoming corporatized. In the recent past, forward integration of big producers into the business of distribution, especially into overseas markets has been noticed. Distributors have been marginalized because many producers are releasing films directly. With the film industry having more corporate players, the distribution game is changing. Producers are now dealing directly with major multiplex companies for distribution deals, while other cinemas, which are largely single-screen theatres, are handled by individual distributors. Thus, the main development that has taken place in the Indian film industry is that film production units are turning into corporate entities and several film production companies are venturing and diversifying into the film distribution business. These companies can benefit from control over distribution surpluses. There is growing commonality of interest among producers and distributors and clear and perceptible trend of integration of the business of film production and distribution.

1.4 Indian/Hindi film industry has entered a new phase of growth, integration, right sizing of all functions across the value chains and is heading towards further consolidation. Although there are limited number of production houses that have the experience of managing all elements of value chains, integration of studio, production and distribution is now a growing trend.

2. Facts

2.1 The informant FICCI-Multiplex Association of India (hereinafter referred to as 'the informant') had filed an information on 26.05.2009 under section 19(1) of the Competition Act 2002 (hereinafter referred to as 'the Act') through its advocates Luthra & Luthra Law Offices, 103, Ashoka Estate, 24, Barakhamba Road, New Delhi 110001.

2.2 It was alleged by the informant that the respondents namely United Producers/Di