CCI finds strike led by Tamil Film Producers Council’s President Vishal Krishna in 2018 as anti-competitive

The Competition Commission of India has found the strike led by Tamil Film Producers Council’s President and actor Vishal Krishna in 2018 as anti-competitive. The order was passed under Section 27 of the Competition Act, 2002 by Ashok Kumar Gupta (Chairperson), Sangeeta Verma (Member) and Bhagwant Singh Bishnoi (Member).

The order was on a petition filed by an ‘Informant’ (whose identity was kept confidential), who was aggrieved by the conduct of the Council and the Telugu Film Chamber of Commerce (Chamber) in collectively boycotting the production, supply, exhibition, distribution and technical development of Tamil and Telugu films in Tamil Nadu and refusing to deal with several stakeholders in the film industry in Tamil Nadu.

The Council went on an indefinite strike against Digital Service Providers (DSP) such as Qube Cinema Technologies and UFO in 2018 by announcing that no shooting or any film-related work would happen until the strike – that was called off after 48 days.

Violation claim

The Informant stated that the actions of the Opposite Parties (OPs) to organise an indefinite and collective boycott of the film industry in Tamil Nadu was in violation of the provisions of the Act. Their conduct was restricting the availability of upcoming Tamil and Telugu films and depriving the consumers from watching the same, for an indefinite period of time.

The Informant alleged that by requiring DSPs to offer their services at commercially unviable rates, the act of OPs will drive DSPs out of the market and consequently their superior technology. This will adversely impact the digitisation of the Indian film industry, thereby resulting in retardation of significant technical development.

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It is evident that the impugned conduct of OPs was actuated for bargaining better commercial terms for their members and as such was within the contours of the prohibited zone of the competition law, being an action relatable to commercial matters, the Order said.

The Commission opined that impugned conduct of OP Associations - TFPC; Office Bearers of TFPC; Executive Committee of TFPC and TFCC in issuing boycott calls to their respective members have violated the provisions of Section 3(1) of the Act read with Section 3(3)(b).

The Council and the Chamber along with their respective office bearers are hereby directed to cease and desist from indulging in future conduct which has been found to violate the provisions of the Act, it said.

The Commission refrained from imposing any monetary penalty upon the associations with a firm warning that any such future conduct would be construed as recidivism with attendant aggravated consequences.

Issuance of strike and boycott calls by trade associations are captured within the framework of competition law which prohibits anti-competitive agreements. The OPs are directed to ensure that the platform of trade associations is not utilised for anti-competitive behaviour and they are advised to conduct events educating their respective members about the awareness of competition law and the consequent need for competition compliance.