Corporate Law

Case study of latest Petition filed with competition

commission
1. FACTS OF THE CASE–
A TV serial was “Mahabharata” was produced in
Hindi language, by M/S BRTV Mumbai, who further
entrusted sole rights of the serial to Magnum TV
serials (MTS), to dub, it is Bengali language. M/S
Hart Video (HV) in turn was appointed by the MTS
to do the same task and so was done. An
agreement with the owners of “channel 10” and
CTVN+ channel, was executed in order to telecast
the dubbed version in the state of West Bengal
The association of producers “Eastern India Motion
Picture Association” (EIMPA) and
Artists/Technicians “Committee of Artists and
Technicians of West Bengal Film and Investors”
(Coordination Committee), raised objections to the
telecast of the same by the way of separate letters,
almost containing the same concerns that entry of
programs originally made in other languages, in the
W. Bengal industry would hamper the production of
local programs and serials in Bengali language and
thereby would adversely affect the job of local
producers and artists.
The appointed channels even received the threat
from these associations that if the telecast of the
serial is not stopped, then channels would face non-
cooperation from the side of associations, to which
channels almost bowed down. Observing the
events, Mr Sajjan Khaitan, ‘informant’ here and also
the proprietor of HV, enlightened the Competition
Commission of India (CCI) about the same.

2.COMPETITION COMMISSION OF INDIA –

CCI, on the information received under Section 19
realized the existence of a prima facie case and
therefore directed the Director General (DG) under
section under Section 29(1) to investigate upon the
alleged facts, which were found to be correct and
relevant market was determined by him as “Film
and Television industry of W. Bengal”.
Hence, issues framed by the CCI are as follows-
1)Whether there were restrictions caused to the
telecast of dubbed serial “Mahabharata” by the
said associations.
2) If yes, then whether those restrictions imposed
by the associations are in contravention of the
Competition Act 2002.
CCI on the perusal of the facts gathered by DG,
answered the 1st fact in issue, in affirmative.
2nd Issue: Application of law to the findings-
1)Associations of Enterprises – The said
associations are trade unions in nature,
notwithstanding which, comprises of the
“enterprises” as defined in Section 2(h), by the
virtue of the fact that the constituent members
of the associations have been indulging in the
activities relating to the production, distribution
and exhibitions of the films. And therefore, the
said associations definitely fall within the ambit
 of “association of enterprises” as used under
the Act.
2)Agreement – the said enterprises as the
members, take decisions on behalf of every
such enterprise being engaged in similar kind of
business in the state of W. Bengal, and also
consult certain other organizations in order to
safeguard the interest of the concerned
enterprises, which further shows the collective
intent of the entire associations, and fall within
the ambit of “Action in Concert” as given in
Section 2(b).
Contravention of the Act-
Since, its proved that the associations were
engaged in similar business as that of informant and
the producer of original “Mahabharat” i.e. both the
parties working at horizontal level, hence the action
of the association attract the element of “Anti-
Competitive Agreement” as specifically given under
Section 3(3), since the associations by causing
restriction on the telecast of dubbed serial, was
limiting or controlling the production, supply of the
serial, market of “Film and Television industry of W.
Bengal” and provisioning of the services by the
channels telecasting it, informant and the producer.
Moreover, the said restrictions also prevented
consumers from enjoying their “right to choose”
and hence in totality it caused the “Appreciable

adverse effect” on the competition of relevant

business in the relevant market, which is prohibited
by Section 3 of the Act.
3.COMPETITION APPELLATE TRIBUNAL–
An appeal was filed in COMPAT under Section 53B,
against the findings of CCI by the coordination
committee only, wherein CCI, agreeing with the
minority view of the CCI, set aside the order of the
majority view of the commission and held the
following opinions-
1)Coordination Committee is a trade union, the
activity of which does not itself constitute an
economic activity, since they were raising simply
 their grievance legitimately which is protected
under Article 19 of the Indian Constitution,
hence the association cannot be even termed as
enterprise and further the question of
“agreement does not arise”.
2)The relevant market is not one as held by the
CCI but, would be “Broadcast of TV Serial”. And
coordination committee which comprised of the
artists and technicians is therefore not on the
same line of business as that of informant i.e. no
horizontal business existed and hence the
question of competition between them under
Section 3(3) does not arise.
3)Thus, CCI erred in holding the stated opinion.
4.THE SUPREME COURT–
The Supreme Court setting aside the order of the
COMPAT, upheld the order of the CCI, further
adding to the legal reasoning-
An entity may be an “enterprise” under section
2(h), regardless of its legal status, if it is indulged
in the any of the prescribed economic activities
under the provision. Apart from it, the
associations could also be counted under the
category of “person” as given under section 2(l),
since it is much wider in scope. Section 3(3) says
that “Any agreement entered into between
enterprises or association of enterprises or
persons or association of persons or between any
persons and enterprise”, and the same provision
further lays down three clauses, which talks about
certain economic activities, if done by the said
enterprise or person or any association
comprising such enterprise or person through
their concerted action, then they will be
presumed to have caused “Appreciable adverse
effect”. Now it is regardless of the fact that an
association was indulging in such an activity for a
charitable purpose, as far as such committed
activity had the potential to earn profits.
The bench affirmed the CCI order that both the
associations actually comprise enterprises who
are engaged in the economic activity of
production, distribution and exhibition of the
films, who take decision on behalf of every such
enterprise engaged in similar business, and their
decisions reflect the collective intent if the whole
association, and therefore activities of both the
association are liable under Section 3.
The Supreme Court, further discussed the
concept of relevant market as an economic one,
as defined under section 2(r), which is to be
determined in accordance with the factors of
relevant geographic market and relevant product
market as given under section 19(5) and other
sub-factors given under section 19(6) and (7). The
court stated that one apparent criterion to define
it can be whether the alleged activity has actually
caused an adverse effect on the competition with
the enterprises carrying the business of similar
nature. In present case, the investigated activities
of the association surely caused the adverse
effect since, the channels telecasting the same
almost succumbed to the threats of the
association and the fact that the entry of dubbed
serial would pose the threat to the local
producers and artists and enhance the
competition in the state of W. Bengal itself is
sufficient to conclude the “Film and Television
industry of W. Bengal” as relevant market.
Therefore, the one held by COMPAT was very
narrow.