Home Substantial portion Film distribution study aims to explore self-regulation for competitive landscape, says CCI chief

Film distribution study aims to explore self-regulation for competitive landscape, says CCI chief

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The Competition Commission is conducting a market study on film distribution in the country with the broader intention of exploring the possibility of a self-regulatory mechanism within the industry to ensure a competitive landscape.

Separately, the antitrust watchdog conducted a study to understand the scenario, where large institutional shareholders hold minority stakes in a number of companies operating in the same industry and competing with each other.

A market study on film distribution has been commissioned to better understand various aspects of the state of competition and concerns over anti-competitive practices in the film distribution chain, said the chairman of India’s Competition Commission (CCI), Ashok Kumar Gupta, to PTI in an interview.

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The study also fits in the context of digitization and OTT (Over The Top) platforms which are becoming key factors in the cinema space.

The watchdog, which monitors unfair business practices in the marketplace, has received cases related to the film industry from time to time.

To get a better understanding of the “construction and dynamics of the market”, CCI commissioned the study and “the intention is also to explore whether there may be a mechanism for self-regulation within the industry to ensure a competitive landscape,” Gupta said.

In the film industry, there are essentially three key players: producers, distributors and exhibitors.

“The study is an attempt to understand the role of different federations and associations in the industry in India and the horizontal and vertical arrangements that exist between market players,” the CCI chief said.

According to him, new challenges have arisen with the digitization of cinema and the use of technology.

“OTTs and other platforms are becoming important channels for content distribution. The study aims to highlight the impact of these developments on the ecosystem in India,” he said, adding that “the study is complete and CCI will now review the report and decide accordingly”.

He noted that the aim was to gain visibility in the markets with major institutional investors, assess common ownership trends and patterns in various sectors in India, and the underlying incentives and motivations of institutional investors behind these investments.

“Given that a significant portion of combination filings come from institutional investors, the idea was also to see if, in the spirit of ease of doing business, the competition assessment could be accelerated.

“This required understanding the rights granted to institutional investors and their impact on the strategic and operational aspects of the activities of companies in the same sector. The investment community engaged with us and also shared their views on the issue of scrutiny and notification, especially when an investor’s investment is in competing companies,” Gupta said.

Lately, CCI has published market research on the e-commerce, pharmaceutical and telecom sectors.

Such studies are done for application and advocacy purposes, and also help to uncover new parameters of competition.

The telecommunications market study highlighted the importance of big tech companies’ data governance structures and privacy at the center of competition law, the ICC said in a speech in March.