The Competition Commission of India (CCI) on Wednesday imposed monetary and non-monetary sanctions on several entities for contravening provisions of Section 3(4) of the Competition Act, 2002.
CCI has imposed a fine of Rs 269.83 lakh on three companies – UFO Movies India, Scrabble Digital and Qube Cinema Technologies.
The trade regulator found that these companies were engaged in anti-competitive practices, including tie-in arrangements, exclusive supply agreements, and refusal to deal.
These practices had the effect of restricting market access and distorting competition in the relevant market, according to the CCI.
UFO Moviez and Qube were identified as significant players in the market for leasing or renting Digital Cinema Initiatives-Compliant Digital Cinema Equipment (DCI-Compliant DCE) to Cinema Theatre Owners (CTOs) in India.
While Upon investigation, the Commission determined that both companies had imposed restrictions through lease agreements that limited CTOs’ ability to access content from other service providers.
This conduct hindered the operations of other entities in the post-production processing (PPP) services sector and effectively blocked a considerable portion of CTOs with DCI-Compliant DCEs from availing services from alternate providers.
CCI directed that UFO Moviez and Qube must not enter into or renew lease agreements with CTOs that impose restrictions on content supply from other parties.
Moreover, existing lease agreements must be modified to ensure that they do not restrict content supply from entities other than UFO Moviez (including its subsidiary Scrabble Digital Ltd.) and Qube.
The fair trade regulator has levied penalties on the companies as follows:
- UFO Moviez, along with Scrabble Digital Ltd., was fined Rs 104.03 lakh
- Qube was fined Rs 165.8 lakh.
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