What were the allegations against PVR for abuse of dominant position? | Explained

Competition Commission of India rejects complaint against PVR, stating no evidence of abuse of dominant position.

The story so far: Having found “no discernible competition concern,” the Competition Commission of India (CCI) rejected a complaint alleging that multiplex chain PVR had abused its dominant market position. Complainant Yogesh Pratap Singh, a film director, had accused the multiplex chain of according preferential treatment to films from large production houses over those by independent film makers.

The competition regulator‘s order held that there was no case of contravention of Section 4 of the Act (that deals with preventing abuse of dominant position) based on the facts, circumstances and allegations levelled in the case.

The primary allegation was that the multiplex chain, utilising its dominant position in the film exhibition market, had accorded preferential treatment to films of the “powerful and monetarily affluent production houses.” The complainant alleged thatthe multiplex’s actions constrained the entry of films by independent filmmakers. Mr. Singh also said that PVR engaged in cartelisation and vertical integration. He cited PVR’s foray into the business of film production; and actions relating to film distribution and film exhibition with big production houses.

In the context of film distribution, vertical arrangements entail agreements between entities at different levels of the production chain; that is, producer-distributor, producer-exhibitor and distributor-exhibitor. Respondents in a previously published market study (Aug 2022) by the regulator had argued that this integration was to increase efficiency, as bringing distribution in-house reduces costs.

Elaborating on his claim of discriminatory treatment, Mr Singh said that his first fictional Hindi film Kya Yahi Sach Hai (2022) and The Indian Supari Company (2022) suffered because PVR and the bigger production houses had allegedly created entry barriers for films by independent film makers. He also argued that an added motivation was the chain being involved in the production of certain films with its company, Starlight Pictures Private Limited.  

For example, as described by the complainant, Ranbir Kapoor-starrer Brahmastra’s multiple trailers would be played several times at screenings free of cost, huge banners were put up with LED displays, and the film was assigned an “overwhelming” number of screens. The last of it was “so much so that, except Brahmastra other films got almost no space in the first week of its release,” the complainant said. Another instance cited by the complainant was PVR temporarily rebranding to PVRRR for the promotion of director S.S. Rajamouli’s RRR. According to Mr Singh, the multiplex chain also accorded the same preferential treatment to actor Aamir Khan’s Laal Singh Chadha.  

Mr Singh also alleged that the screen allocation policy of the chain was “opaque” and “discriminated” against him. He had earlier elaborated on the potential of his film Kya Yahi Sach Hai, highlighting that the movie had garnered 1.30 million views on YouTube.