Image Source: Business Standard
UFO Moviez India Ltd has filed an appeal against the latest order issued by the Competition Commission of India (CCI) on April 16, 2025, where monetary and non-monetary penalties were imposed on UFO Moviez, its subsidiary Scrabble Digital Ltd., and Qube Cinema Technologies Pvt. Ltd. The CCI had held these companies guilty of indulging in anti-competitive practices, such as tie-in arrangements, exclusive supply agreements, and refusal to deal, under Section 3(4) of the Competition Act, 2002.
CCI Order and Penalty:
The CCI levied a penalty of ₹1.04 crore on UFO Moviez and Scrabble Digital Ltd., and ₹1.65 crore on Qube Cinema Technologies, in aggregate ₹2.69 crore. The Commission also issued cease-and-desist orders and ordered modification of current lease agreements to exclude prohibitions on content supply from parties other than UFO Moviez and Qube.
Nature of Violations:
The companies were held to have erected barriers for Post-Production Processing (PPP) service providers and barred Cinema Theatre Owners (CTOs) from showing content sourced from third parties. This behavior was considered to have an appreciable foreclosure effect on competition in the digital cinema exhibition market.
Background of the Case:
The matter started with a complaint filed by film producer Ravinder Walia and Prime Focus Ltd. in 2020, alleging that UFO Moviez disabled leased equipment to avoid showing films that were not processed by Scrabble Digital, which is amounting to abuse of dominance and refusal to access the market.
UFO Moviez's Response
UFO Moviez has contested the CCI’s findings, stating that market shares alone are insufficient to infer market power. The company has now filed an appeal against the order, seeking relief from the penalties and directives imposed.
CCI’s Directives:
The Commission directed UFO Moviez and Qube not to re-enter lease agreements imposing content supply restrictions and mandated modification of existing agreements to allow CTOs freedom to source content from other providers.
Insight
The appeal by UFO Moviez highlights the ongoing tussle between regulatory authorities and dominant players in India’s digital cinema ecosystem. The case underscores the CCI’s commitment to fostering competition and preventing anti-competitive practices in emerging technology-driven markets. The final outcome of the appeal will be closely watched by industry stakeholders, as it may set important precedents for competition law enforcement in the media and entertainment sector.
Source: Press Information Bureau, Dentons Link Legal Newsletter, Deccan Herald, Economic Times, Medianama, Film Information
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