CCI closes case against Karnataka Film Chamber of Commerce

Kannada Film Chamber of Commerce Vs Karnataka Film Chamber of Commerce (Competition Commission of India)

The dispute between the Kannada Film Chamber of Commerce (KFCC) and the Karnataka Film Chamber of Commerce (KFCC) has captured significant attention within the Indian film industry. The crux of the issue lies in allegations of anti-competitive practices and defiance of previous orders issued by the Competition Commission of India (CCI). This article delves into the details of the case, the arguments presented by both parties, and the final ruling by the CCI.

The Kannada Film Chamber of Commerce (Informant), represented by its President Mr. Krishnegowda, filed an information with the Competition Commission of India (CCI) against the Karnataka Film Chamber of Commerce (KFCC), Karnataka Television Association, Karnataka Film Producers Association (KFPA), and certain individuals (collectively referred to as Opposite Parties or OPs). The Informant alleged that the OPs were in violation of the CCI’s order dated 27.07.2015 and were engaging in anti-competitive practices.

Background

1. Original CCI Order (27.07.2015): The CCI had earlier directed the KFCC and KFPA, among others, to cease and desist from engaging in anti-competitive practices. These practices included actions that restricted competition in the regional film industry, specifically targeting the boycott and ban of dubbed content.
2. Allegations: The Informant claimed that despite the CCI’s order, the OPs had continued to engage in anti-competitive behavior. They were accused of instigating members and associated bodies to boycott the Informant and ban the release and broadcast of dubbed content. This instigation was allegedly carried out through social media posts and audio clips circulated on platforms like WhatsApp.
3. Legal Action and Compliance: Due to the continued non-compliance with the CCI’s order, a complaint was filed under section 42(3) of the Competition Act, 2002, with the Chief Metropolitan Magistrate in New Delhi. Consequently, fines were imposed on the KFCC and other organizations. However, the Informant argued that compliance required more than just the payment of fines; it also required cessation of anti-competitive practices.

Current Complaint and Requests

The Informant sought the following from the CCI:

1. Interim Relief: An order under Section 33 of the Act to restrain the OPs from further instigating boycotts against the Informant and banning dubbed content.
2. Punishment for OPs: Recognition of the anti-competitive actions by the OPs and appropriate punitive measures under the Act.

Proceedings and Findings

1. Request for Additional Information: On 07.02.2024, the CCI requested additional information from the Informant to support their allegations. However, the Informant failed to respond or seek an extension within the stipulated time.
2. Evaluation of Evidence: The CCI reviewed the available material and found the evidence insufficient to establish the alleged violations of Sections 3 and 4 of the Act by the OPs.

Decision

Due to the lack of sufficient and credible information provided by the Informant, the CCI decided to close the matter under Section 26(2) of the Competition Act, 2002. The decision was communicated to the Informant, concluding that the allegations did not warrant further investigation or action.

Analysis

Key Issues Addressed

1. Non-compliance with Previous Orders: The Informant emphasized repeated violations of the 2015 CCI order by the OPs. The primary contention was that the OPs were continuing anti-competitive practices despite being previously fined and directed to cease such actions.
2. Anti-competitive Practices: The practices in question included the boycott and ban of dubbed content, which the Informant argued stifled competition and restricted the market for dubbed films.
3. Evidentiary Support: A significant aspect of the case was the lack of concrete evidence provided by the Informant. Despite claims of social media posts and audio clips, the failure to submit requested additional information weakened their case.

Conclusion

On February 7, 2024, the Competition Commission of India, after reviewing the available material, concluded that the informant did not supply the necessary clarification or comments as requested. Due to the lack of sufficient and credible information regarding the conduct of the respondents, the CCI decided to close the case under Section 26(2) of the Competition Act, 2002. The decision was communicated to the informant, marking an end to this particular chapter in the ongoing dispute between the Kannada Film Chamber of Commerce and the Karnataka Film Chamber of Commerce.

FULL TEXT OF THE JUDGMENT/ORDER OF COMPETITION COMMISSION OF INDIA

1. The present Information has been filed by Kannada Film Chamber of Commerce through its President Mr. Krishnegowda (‘Informant’) under Section 19(1)(a) of the Competition Act, 2002 (‘Act’).

2. It is alleged that in complete disregard of the order dated 27.07.2015 in Case No. 58 of 2012, passed under Section 27 of the Act by the Commission, D.K. Ramakrishna @ Praveen Kumar (‘OP-3’), Madhavananda Yogappa Shegunashi (‘OP-4’) and Mr. S. Kumar Shreenivasamurthy (‘OP-5’) have started instigating the members of Karnataka Film Chamber of Commerce (‘OP-1’), Karnataka Television Association and Karnataka Film Producers Association (OP-2) as well as other bodies/organisation associated with regional films to boycott Kannada Film Chamber of Commerce (‘Informant’) and ban the release and broadcast of any dubbed content. (hereinafter, OP-1 to OP-5 are collectively referred to as OPs). It is alleged that the OPs are in violation of Section 3(1), 3(3), 4(1) and 4(2) of the Act.

3. It is averred that in the order dated 27.07.2015, organisations including OP-1 and OP-2 were, inter alia, directed by the Commission to cease and desist from certain anti­competitive practices and the same were found to be in violation of the Act.

4. It is alleged that the OPs have again started disobeying the order of the Commission and also instigating others to defy the order/direction passed by the Commission.

5. It is further alleged that OPs are trying to boycott the Informant through series of communications (including posts on social media platforms) urging ban on release and broadcast of any dubbed content in contempt of the Commission’s order dated 27.07.2015. The Informant has alleged that audio clips are being widely circulated in multiple WhatsApp groups and social media hurling abuses at President of Kannada Film Chamber of Commerce (earlier known as Dubbing Film Chamber of Commerce) and is further instigating thousands of citizens to disobey the order passed by the Commission. The Informant stated that it even sent a legal notice.

6. The Informant has averred that due to non-compliance of the order dated 27.07.2015, a complaint was filed under section 42(3) of the Act before the Learned Chief Metropolitan Magistrate, Patiala House District Court, New Delhi and that KFCC, KFPA and other organisations paid the fine to comply with the order dated 27.07.2015 passed by the Commission. On the basis of the same, the Informant also submitted that the Commission had decided not to proceed further and that the compliance was not limited to payment of fine but also to “cease and desist” from indulging in anti­competitive practices.

7. The Informant has prayed for an interim relief under Section 33 of the Act to pass an order restraining the OPs from circulating messages and/or audio clips and/or by any other mean from instigating the members of the Karnataka Film Chamber of Commerce, Karnataka Television Association and Karnataka Film Producers Association as well as the other bodies/organization associated with regional films, to boycott Kannada Film Chamber of Commerce and also, from banning the release and broadcast of any dubbed content.

8. The Informant has prayed to the Commission to take cognisance of the present Information and punish the OPs as per the provisions of the Act.

9. Vide order dated 07.02.2024, the Commission sought certain additional information/comments/clarification from the Informant. In its meeting held on 01.05.2024, the Commission noted that the order dated 07.02.2024 was received by the Informant on 22.02.2024. The Commission further noted that neither the Informant has filed any reply nor sought any extension of time for filing the same. Consequently, the Commission decided to pass an appropriate order in due course on the basis of facts available in the Information filed by the Informant.

10. After perusal of the material available on record, the Commission notes that the Informant failed to provide clarification/comments as sought. As a result, the present matter is found to lack sufficient and credible information about the conduct of the OPs, alleged to be violative of Section 3 and 4 of the Act. Therefore, the Commission directs that the matter be closed forthwith under Section 26(2) of the Act.

11. The Secretary is directed to communicate the decision of the Commission to the Informant, accordingly.