Jun 21, 2018

CCI Disposes of Information filed by Indian Motion Picture Producers’ Association against Federation of Western India Cine Employees and its Affiliates

On April 18, 2018, CCI disposed of the information filed by Indian Motion Picture Producers’ Association (‘IMPPA’) against Federation of Western India Cine Employees (‘FWICE’) and its affiliates alleging a violation of Sections 3 and 4 of the Competition Act.[1] The members of IMPPA are engaged in the production of films and daily programmes for television channels. FWICE, which is registered under the Trade Unions Act, 1926, is a federation of different craft associations associated with the Mumbai based film & television industry and it is the parent body of all its affiliate associations.IMPPA alleged that FWICE and its affiliates were compelling IMPPA to use their services by dictating certain terms and monopolizing the film production business and that without their consent, no producer could proceed to produce a film or television program. IMPPA alleged specific anti-competitive behavior by citing certain non-cooperative directives and imposing of compulsory holidays, thereby stalling the shooting and post-production activities of tele-serials/ films all over India.CCI considered these allegations and found that the information in the case was filed when a similar matter, Shri Vipul A. Shah v. All India Film Employee Federation[2] was pending before it involving similar issues against FWICE and its affiliates. CCI noted that the matter had been disposed of by passing a cease and desist order. Since IMPPA had made submissions in that case which overlapped with the instant case, CCI noted that the order which had already been passed settled its position on issues in the present complaint. Specifically, in relation to the issue of circulars directing producers to observe specific holidays, CCI held that in the previous case it had already observed that the fixing of holidays is not a matter within the domain of the Competition Act. Similarly, CCI observed that although prescribing wages has the effect of fixing the prices of services, such wages/ increments are also part of the conditions of labour/ terms of employment falling within the realm of legitimate trade union activities when duly negotiated by a registered trade union and are thus not anti-competitive. However, with regard to the issue of non-cooperation directives against members of IMPPA, as held in the previous case, CCI noted that this tends to disrupt competition in the market and amounts to limiting and controlling services in contravention of Section 3(3)(b) of the Competition Act. CCI concluded that its orders are in rem and not in personam and since it had already passed a cease and desist order after dealing with all the allegations, it is not expected to do so again by dealing with successive complaints for the same conduct against the same parties by separate orders. CCI nevertheless clarified that if the alleged conduct of FWICE and its affiliates continues in defiance of the previous order, IMPPA is at liberty to approach it for appropriate orders.With regard to the allegations on the violation of Section 4 of the Competition Act, CCI held that no material was placed on record by IMPPA to suggest that FWICE and its affiliates are engaged in any economic activity in order to be considered as an ‘enterprise’ under the Competition Act and stated that no conclusion of abuse can be drawn on the basis of such allegations.[1] Case No. 45 of 2017. [2] Case No. 19 of 2014.

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