Pressure tactics by cine artists and producers to prohibit dubbed serials anti-competitive Supreme Court

The Supreme Court of India has ruled that pressure tactics employed by a committee of artists and technicians of the film and television industry, with a view to prohibit telecast of dubbed serials, would amount to an anti-competitive practice under Section 3 of the Competition Act, 2002..The judgment was delivered by a Bench of Justices AK Sikri and Abhay Manohar Sapre in an appeal filed by the Competition Commission of India (CCI) against the decision of Competition Appellate Tribunal (COMPAT)..Facts.The factual matrix of the case is that M/s. BRTV, Mumbai which is the producer of the Hindi TV Serial ‘Mahabharat’, sought to dub and telecast the same in Bengali. M/S Hart Video was sub-assigned the right to distribute the dubbed serial. Two TV channels, CTVN+ and Channel 10, bagged the rights for telecasting the same when the real battle began..Two associations, one of producers in West Bengal called ‘Eastern India Motion Picture Association’ (EIMPA) and the other of artists and technicians called ‘Committee of Artists and Technicians of West Bengal Film and Television Investors’ (Co-ordination Committee) wrote letters to the two TV channels asking them not to telecast the dubbed serial..The apprehension was that dubbed serials may deter production of such serials in Bengali because of the entry of serials produced in other languages by dubbing the same in their language. This in turn would adversely affect the producers, artists and technicians working in West Bengal. The two associations also threatened the two channels of non-cooperation if they did not stop the telecast..When the proprietor of Hart Video came to know of the same and found that the two television channels were going to succumb to the pressure exerted by the two associations, he informed CCI of the same and requested the CCI to take action..Director General’s report.The CCI assigned the matter to the Director General (DG). The DG, after investigation, submitted his report to the CCI. He opined that in the instant case ‘relevant market’ would be the ‘film and television industry of West Bengal’..He further recorded that the Coordination Committee consisted of persons or association of persons who were dealing with identical market of film making. In his opinion, any agreement of joint action taken by the constituents, being in the nature of horizontal agreement, could be examined under the provisions of Section 3(3) of the Act..The DG, therefore, concluded that the impugned actions of the Coordination Committee and EIMPA which resulted in actually stopping the telecast of the serial by Channel 10 (though CTVN+ continued to telecast), amounted to restricting its commercial exploitation and were in violation of the provisions of Section 3(3)(b) of the Act..CCI decision and appeal to COMPAT.The CCI, after considering the report of the DG and the objections of the two Associations, framed two issues.. Whether EIMPA and Co-ordination Committee imposed/attempted to impose restrictions on the telecast of dubbed serial ‘Mahabharat’? Whether the act and conduct of imposing restrictions on telecast of the said serial is in violation of provisions of the Act?.The first issue was answered in the affirmative. Regarding the second issue, the majority members held that since the Coordination Committee was not an ‘enterprise’, the question of breach under Section 4 did not arise. However, it held that the activities of the Coordination Committee fell within the ambit of Section 3 of the Act and violated that provision, since it had an adverse effect on competition. It accepted that the Coordination Committee and the EIMPA were trade unions. Notwithstanding, they were not exempted from the purview of the Act..The Co-ordination Committee preferred to appeal to the Competition Appellate Tribunal. The Tribunal overturned the decision of the CCI. In the first place, it affirmed the opinion of the dissenting member of the CCI on the question of ‘relevant market’ by holding that the relevant market was not the ‘Film and Television Industry in the State of West Bengal’, but the ‘telecasting of the dubbed serial on television in West Bengal’..Thereafter, the COMPAT took note of the provisions of Section 3(3) of the Act and concluded that the Coordination Committee was not trading in any groups, or provisions of any services, much less by the persons engaged in identical or similar trade or provisions of services. Therefore, it could not be said that there was any ‘agreement’ as envisaged in Section 3 entered into..According to the COMPAT, Section 3(3)(b) of the Act applies to competitors who would be in the same line of commercial activity and by their agreement tend to restrict the competition. Since the actions of the Co-ordination Committee was merely a protest for voicing its grievance for the benefit of its members and even if such a move was influenced by foul play, that in itself would not become a competition issue covered by the Act..The CCI appealed to the Supreme Court against the decision of the Appellate Tribunal..Supreme Court.Relevant market.The first issue considered by the court was what would be the relevant market be for the purpose of this dispute. It was held,.“The dispute is as to whether relevant market would cover ‘broadcast of TV serial’ or it would take within its sweep ‘film and TV industry of the State of West Bengal’.” .The Court then stated that the effect of the cause on which the Coordination Committee based its agitation has to be considered to determine the relevant market. Terming the view taken by the COMPAT as myopic, the court held the following:.“The Tribunal has upheld the minority view of CCI in saying that nature of the information does not show anything which could even be distinctly connected with the whole ‘film and television industry in the State of West Bengal’. The information is only against showing the dubbed serial on the television and it has no relation whatsoever with production, distribution, etc. of any film or any other material on the TV channels. .We feel that this is a myopic view taken by the Tribunal which ignores many other vital aspects of this case, most important being the width of the effect of the aforesaid cause on which the agitation was led by the Coordination Committee. The effect is not limited to the telecast or broadcast of the television serial….…. even as per the agitators, the said broadcast was going to adversely affect the TV and Film Industry of West Bengal and the alleged purport behind the threats was to save the entire TV and Film Industry. The Coordination Committee itself mentioned so in its letter dated February 18, 2012..The relevant market was, therefore, not limited to the broadcasting of the channel but entire film and television industry of West Bengal.” .Person and Agreement.The Court then addressed the central issue, whether the Coordination Committee is a ‘person’ under Section 2(l) of the Act and whether the activities of the Coordination Committee can be considered as ‘Agreement’ for the purpose of Section 3 of the Act..The Court held that though the Coordination Committee is akin to a trade union, it is not undertaking any economic activity by itself. However, it chose to look beyond that – into the nature of the constituent members of the Coordination Committee and its impugned acts..“The Coordination Committee (or for that matter even EIMPA) are, in fact, association of enterprises (constituent members) and these members are engaged in production, distribution and exhibition of films….…The constituent members of these bodies take decision relating to production or distribution or exhibition on behalf of the members who are engaged in the similar or identical business of production, distribution or exhibition of the films. Decision of these two bodies reflected collective intent of the members. When some of the members are found to be in the production, distribution or exhibition line, the matter could not have been brushed aside by merely giving it a cloak of trade unionism. .For this reason, the argument predicated on the right of trade union under Article 19, as professed by the Coordination Committee, is also not available.” .Regarding the impugned acts of the Coordination committee, the court held the following:.“One can clearly view that prohibition on the exhibition of dubbed serial on the television prevented the competing parties in pursuing their commercial activities. Thus, the CCI rightly observed that the protection in the name of the language goes against the interest of the competition, depriving the consumers of exercising their choice. .Acts of Coordination Committee definitely caused harm to consumers by depriving them from watching the dubbed serial on TV channel; albeit for a brief period. It also hindered competition in the market by barring dubbed TV serials from exhibition on TV channels in the State of West Bengal. .It amounted to creating barriers to the entry of new content in the said dubbed TV serial. Such act and conduct also limited the supply of serial dubbed in Bangla, which amounts to violation of the provision of Section 3(3)(b) of the Act.”.It, therefore, allowed the appeal and set aside the judgment of the COMPAT..Read the full judgment below.