Competition Commission slaps fine on regional film bodies

The Competition Commission of India (CCI) has levied penalty of more than Rs46 lakh collectively on seven film trade associations across the country for engaging in malpractices and stopping the exhibition of several Bollywood blockbusters in the respective regional markets.

Reliance Big Entertainment, UTV, Eros International and FICCI Multiplex Association of India had complained to CCI that they were forced to follow the diktats of film trade bodies in Karnataka, Bihar, Jharkhand and other Eastern, Northern and Southern states. They had also alleged that Hindi films were boycotted or banned in these states if the Bollywood distributors or producers refused to follow the guidelines set by the regional trade associations.

The order was based on the findings of the Director General (Investigations) who probed the matter after receiving separate complaints from four Mumbai-based distributors, exhibitors and producers. CCI is a government-run regulatory body that ensures fair and free trade in Indian markets.

“Looking at the gravity of the allegations, the Commission decides to impose a penalty on each of these associations at the rate of 10 per cent of the average of the last three years’ income,” the CCI said in an order dated February 16. The order was made public on Saturday after being uploaded on the CCI website.

The CCI has also directed the associations to not make any discrimination between regional and non-regional films. It added that the number of screens or the manner in which the film should be exhibited shall not be determined by these bodies. At the same time, the condition of compulsory registration of films as a pre-condition for release shall be dispensed with.

The order has naturally been welcomed by Bollywood producers and distributors. “It will pave way for opening up business opportunities, will up revenues for film makers and will remove the intermediaries and extortionists,” said Sanjeev Lamba, CEO of Reliance Entertainment. The company had first approached the CCI in 2010 when the Hrithik Roshan starrer Kites was banned by the Karnataka Film Chamber of Commerce (KFCC) for “violating local industry norms” which dictated that Hindi films can only be released in 24 halls in the territory.

The regional film bodies are known not just to restrict the exhibition of movies on the basis of language but to also dictate terms for the release of films through other media like CDs or televsion.