Background

On September 14, 2023, CCI dismissed the complaint filed by Sobhagaya Media Pvt Ltd. (‘Informant’) against DEN Networks Ltd. (‘Opposite Party’) alleging contravention of Sections 3 and 4 of the Competition Act.^[1]

Allegations

The Informant who had an agreement (‘MOU’) with the Opposite Party to carry its channel on Opposite Party’s addressable networks for a payment of carriage charges made the following allegations against the Opposite Party:

i.    Charging Exorbitant Carriage Fee: The Opposite Party was charging an exorbitant carriage fee to carry Informant’s channels in the Opposite Party’s addressable networks which was not in line with Telecom Regulatory Authority of India’s (‘TRAI’) consultation paper and subsequent notice (upheld by the Madras HC);

ii.   Discriminatory Treatment: The Opposite Party charged much lower carriage fee from other media companies running more channels in comparison to the Informant; and

iii.  Refusal to Deal: The Opposite Party has contravened Section 3(4)(d) of the Competition Act since the conduct of the Opposite Party results in a constructive refusal to deal since discounts are offered to other channels on certain parameters and the Informant is treated differently and excluded resulting in a refusal to deal.

Interim Relief: The Informant sought interim relief to the extent of directing the Opposite Party to carry and air the Informant’s channel free of cost till the investigation is concluded.

CCI’s Assessment

CCI dismissed the Complaint and closed the matter by issuing an Order under Section 26(2) of the Competition Act on following grounds:

i.    Relevant Market: The CCI delineated the relevant market as market for cable TV service in the state of Uttar Pradesh (‘Relevant Market’), in this regard the CCI observed that: (i) DTH services are not perfectly substitutable with cable TV services, as certain factors are unique to the cable industry; cable TV operators can provide broadband and voice services in addition to the distribution of TV channels, unlike DTH operators; and (ii) cable TV networks operate on a State/regional basis and can choose specific channels to be supplied according to the demand in a particular area whereas DTH services operate on a national basis and transmit the same channels throughout the country irrespective of variations in demand of channels in different market; and

ii.   Section 4 of Competition Act: CCI also observed that the Informant has not provided any evidence suggesting the dominance of the Opposite Party and noted the existence of other players which reflect minimal entry barriers. Thus, CCI held that the Opposite Party was not dominant in the Relevant Market. Additionally, the CCI also observed that the Informant has not placed any evidence proving the excess carriage charge being levied by the Opposite Party and ultimately closed the case.

Accordingly, the CCI dismissed the information and closed the matter under Section 26(2) of the Competition Act (accordingly also denying the Informant’s prayer for interim relief).

[1] In Re: Sobhagaya Media Pvt Ltd. v. DEN Networks Ltd., Case No. 11 of 2023.