CCI imposes monetary, non-monetary sanctions on UFO Moviez, Qube Cinema Technologies

New Delhi, April 16: The Competition Commission of India (CCI) passed an order on Wednesday under the provisions of Section 27 of the Competition Act, 2002 (Act) imposing monetary and non-monetary sanctions on UFO Moviez India Pvt. (UFO Moviez), Scrabble Digital Ltd. and Qube Cinema Technologies Pvt. Ltd. (Qube), for contravention of provisions of Section 3(4) of the Act, resulting in tie-in arrangement, exclusive supply agreement and refusal to deal, a release said.

In this matter, the Commission determined that UFO Moviez and Qube were significant players in the relevant market for the supply of Digital Cinema Initiatives-Compliant Digital Cinema Equipment (DCI-Compliant DCE) on lease/rent to Cinema Theatre Owners (CTOs) in India.

The Commission found that UFO Moviez and Qube, through imposition of restrictions on supply of content in lease agreements entered into with CTOs, created barriers for players engaged in the provision of Post-Production Processing (PPP) services as well as blocked a significant portion of CTOs having DCI-Compliant DCEs from being served by any other player.

The Commission held UFO Moviez (along with its subsidiary Scrabble Digital Ltd.) and Qube in contravention of provisions of Section 3(4) of the Act.

The Commission, under the provisions of Section 27 of the Act, directed UFO Moviez and Qube to not re-enter lease agreements with the CTOs imposing restrictions on supply of content from other parties.

The Commission further held that the existing lease agreements with CTOs shall stand modified such that they do not impose restrictions on supply of content from parties other than UFO Moviez (and its affiliates) and Qube, the release said.

The Commission, after considering nature and gravity of the contravention along with assessment of mitigating and aggravating factors, also imposed monetary penalty on UFO Moviez (along with its subsidiary Scrabble Digital Ltd.) and Qube, amounting to Rs. 104.03 Lakh and Rs. 165.8 Lakh, respectively.

Reader Comments

R

Rahul K.

Finally some action against these anti-competitive practices! Theater owners have been suffering for years with these restrictive agreements. Good move by CCI 👏

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Priya M.

The penalties seem quite small compared to the profits these companies must have made through these practices. Shouldn't the fines be more deterrent?

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Amit S.

As someone in the theater business, this is a welcome change! We've been forced to use their services even when better options were available. Hope this brings more competition to the market.

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Neha T.

While I support the decision, I wonder how effectively these non-monetary sanctions will be enforced. The industry needs proper monitoring to prevent similar practices in future.

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Sanjay R.

This is great news for smaller production houses! More options for theater owners means more opportunities for independent filmmakers to get their content screened 🎬

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Kavita P.

The article could have explained the technical aspects better - what exactly are DCI-Compliant DCEs? Some context would help non-industry readers understand the significance better.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.