The CCI has declined interim relief to Vijay Gopal, the proprietor of Vanilla Entertainments. He alleged that BookMyShow has been found resorting to ‘Abuse of dominant position’.
The three-member bench headed by Ashok Kumar Gupta (Chairperson), Sangeeta Verma (Member) and Bhagwant Singh Bishnoi (Member) earlier had noted that there is an existing prima facie case relating to the conduct of BookMyShow, which may require an investigation by the Director General in order to determine whether the conduct of BookMyShow has resulted in a contravention of the provisions of Section 4 of the Competition Act, 2002.
WHAT WERE THE ALLEGATIONS?
The informant alleged that BookMyShow collects a convenience fee of INR 25 per ticket as from consumers who opt for online booking and then shares 50% of the said fee as commission with the multiplexes. Meanwhile, it gives a commission of INR 6-8 per ticket in the case of single screen theatres.
Meanwhile, Showtyme, which belongs to the Informant, offered up to INR 5 to the multiplexes and theatres out of INR 11 to be charged by it and would keep the rest for running its own operations. However, it is alleged that the multiplexes and theatres are unable to associate with Showtyme due to ‘cash loans’ or monetary deposits given by BookMyShow to them on “zero interest”. Hence, the informant has alleged that the OPs are acting in collusion.
It was also alleged that BookMyShow has signed “exclusive and refusal to deal” agreements with Indra Cineplex LLP, Asian Multiplexes Pvt. Ltd., Cinepolis India Pvt. Ltd., PVR Multiplex, INOX Multiplex and Sudarshan Theatre. It was further alleged that “refusal to deal” agreements were signed ranging between 2 to 5 years with the theatres, ensuring that they are not selling the tickets on any other online platform. This in turn was leading to an overall increase in the ticket price.
OBSERVATION BY CCI
CCI here observed that the informant was unable to make a case out of Sec 33 of Competition Act, 2002, which mentions the power to grant interim relief. The allegations were called baseless by the CCI and were not supported by proof. It was also noted that the portal was set up by the informant after filing the information, pointing out the sole purpose of harassing BookMyShow and misleading the commission.
BookMyShow contended that the informant approached the Commission with unclean hands and stated that allegations of creating an entry barrier are misleading as the market is volatile in nature and still evolving. An investigation has been ordered earlier into the allegations made by the complainant and a report is awaited from the Director General of the investigation within 60 days.
The main goal here was to direct BookMyShow to refrain from selling more than 25% of its tickets of any theatres in Andhra Pradesh and Telangana and not more than 50% of the tickets in the rest of India on its platform.
CONCLUSION
With regard to the allegations that were put forward by the Informant relating to charging of high convenience fee and sharing a part thereof with cinema theatre owners, the Commission views that it can’t act as a price regulator in order to determine the correct fee. Nevertheless, exclusivity arrangements made by BookMyShow might result in softening of competition and hence, could bolster the market power of BookMyShow without any incentive for it to lower such fees in foreseeable future.
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Sources: www.newindianexpress.com, www.livelaw.in, www.thehindu.com