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TMI Blog2017 (3) TMI 1692X X X X Extracts X X X X X X X X Extracts X X X X ..... serials and telecasting regional serials in the States of Eastern India, which includes the State of West Bengal. M/s. BRTV, Mumbai, which is the producer of T.V. programmes, had produced T.V. Serial named 'Mahabharat', original version whereof was in Hindi. The said BRTV entrusted the sole and exclusive rights of 'Mahabharat' to M/s. Magnum T.V. Serials to dub the Hindi version of the said serial in Bangla with further rights to exploit its Satellite, Pay TV, DTH, IPTV, Video, Cable TV and internet rights till September, 2016. Magnum TV, in turn, appointed Hart Video as the sub-assigner to dub the said serial 'Mahabharat' in Bangla language, which it did. Thereafter, for the purposes of telecasting the said dubbed serial, an agreement was executed for the time slot, on revenue sharing basis, with M/s. Bengal Media Pvt. Ltd., Kolkata, which is the owner of 'Channel 10', as well as with M/s. Calcutta Television Network Private Ltd., Kolkata, which is the owner of CTVN+ Channel. These two channels were given hard disks of four episodes of the serial on 2nd February, 2011 and 12th February, 2011. An advertisement was placed in Daily Newspapers on 19th February, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id details and requested the CCI to take action in the matter, as according to him, the aforesaid act on the part of EIMPA as well as the Coordination Committee contravened the provisions of the Act. Even an interim relief was sought in the nature of direction from CCI to CTVN+ and Channel 10 not to yield to the threats of EIMPA and Coordination Committee and restart the telecast of the serial which was stopped since 17th April, 2011. Hereafter, Respondent No. 2 shall be described as the 'informant'. The CCI, after receiving the aforesaid information from the informant formed a prima facie opinion that acts on the part of EIMPA and Coordination Committee were anti-competitive. Accordingly, matter was assigned to the Director General (DG) for detailed investigation as per the procedure prescribed in the Act. On investigation, the DG found that the details contained in the information supplied by the informant were factually correct. On that basis, he examined the matter in the context of provisions contained in the Act. In order to understand with clarity the task undertaken and accomplished by the DG, we deem it proper to refer to some of the relevant provisions of the Act at thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r trade of goods or provision of services, which- (a) directly or indirectly determines purchase or sale prices; (b) limits or controls production, supply, markets, technical development, investment or provision of services; (c) shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way; (d) directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition: Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services. Explanation.-For the purposes of this sub-section, "bid rigging" means any agreement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from India to the extent to which the agreement relates exclusively to the production, supply, distribution or control of goods or provision of services for such export. " As can be seen from the bare reading of the aforesaid provision, sub- section (1) of Section 3 puts an embargo on an enterprise or association of enterprises or person or association of persons from entering into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provisions of services which causes or is likely to cause an appreciable adverse effect on competition within India. Thus, agreements in respect of distribution or provisions of services, if they have adverse effect on competition, are prohibited and treated as void by virtue of sub-section (2). Sub-section (3), with which we are directly concerned, stipulates four kinds of agreements which are presumed to have appreciable adverse effect on competition. Therefore, if a particular agreement comes in any of the said categories, it is per se treated as adversely effecting the competition to an appreciable extent and comes within the mischief of sub-section (1). There is no further need to have actual pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hbouring areas; 2(t) "relevant product market" means a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use; 2(u) "service" means service of any description which is made available to potential users and includes the provision of services in connection with business of any industrial or commercial matters such as banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising; xx xx xx 2(x) "trade" means any trade, business, industry, profession or occupation relating to the production, supply, distribution, storage or control of goods and includes the provision of any services; " At this stage, we would like to refer to Section 19 of the Act which permits the CCI to conduct an enquiry into certain kinds of agreements and dominant position of enterprise. Sub-section (1) of Section 19 empowers the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, being in the nature of horizontal agreement, could be examined under the provisions of Section 3(3) of the Act. The impugned action of the Coordination Committee and EIMPA threatening non-cooperation in case telecast of the serials was not stopped and holding demonstrations as well as organising strike, which resulted in actually stopping the telecast of the serial by Channel 10 (though CTVN+ continued to telecast), amounted to restricting its commercial exploitation and was, therefore, unjustified. He found that following conduct of the Coordination Committee specifically contravened the provisions of the Act: "a. Act of the Co-ordination Committee writing a letter on 18.02.2011 to CCTVN Plus Channel asking it to stop the telecasting of Mahabharata serial. b. Further, act of the Co-ordination Committee writing a letter on 01.03.2011 to Channel 10 and letters on 11.03.2011, 12.03.2011 and 14.03.2011 to CTVN Plus Channel asking them to stop the telecast of Mahabharata serial. c. Observance of one-day work stoppage on 07.04.2011 against telecast of the Mahabharata serial by the members of all the constituents of Co- ordination Committee and demonstration on the same day from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same into Bangla in order to safeguard the interest of its members. It was their constitutional right to lodge such protests under Article 19(1)(a) of the Constitution of India. The DG, however, did not get convinced with the aforesaid defence put by the Coordination Committee and found that the agitation of the Coordination Committee was uncalled for inasmuch as there was a huge potential of local film artists, and the industry was not likely to suffer on account of the dubbed serials shown on the said channels. He also found the industry of television channels in Bangla was growing by leaps and bounds and, therefore, argument of the Coordination Committee was not based on facts. Thus, their action was held to be unjustified, as it had resulted in foreclosure on competition by entering into the market as well as foreclosure of business opportunities for the businessmen engaged in the production, distribution and exhibition/telecast of such programmes. This, according to him, came within the mischief of Section 3(3)(b) of the Act. Against the aforesaid report of the DG, being adverse to the Coordination Committee as well as EIMPA, both of them preferred their objections befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , first mistake committed by the DG was that he did not identify the 'relevant market' correctly. According to him, 'relevant market' was 'broadcast of TV serial' and not 'Film and TV Industry of West Bengal' as found by the DG. After identifying the relevant market as broadcast of TV serials, learned member opined that broadcast of TV serials took place either by way of Direct to Home Services (DTH) or through Cable and, therefore, broadcasting service is altogether a separate market, different from production, exhibition and distribution of films. Insofar as the two channels, namely, CTVN+ and Channel 10 are concerned, they were in the market for telecasting programmes for the viewers of the DTH category or Cable TV category and were not in production, distribution or exhibition of dubbed films. According to the minority view, since the offending parties, i,e., Coordination Committee and EIMPA, were not active in the relevant market of broadcast of dubbed TV serials, there was no question of any violation of any provisions of the Act. It was further held that Section 3 of the Act does not take into its fold coercive actions taken by workers' un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Section 3(3) of the Act and concluded that the Coordination Committee was not trading in any groups, or provisions of any services, much less by the persons engaged in identical or similar trade or provisions of services. Therefore, it could not be said that there was any 'agreement' as envisaged in Section 3 entered into. According to the Tribunal, Section 3(3)(b) of the Act applies to the competitors who would be in the same line of commercial activity and by their agreement tend to restrict the competition. No evidence to this effect was available in the instant case. It was merely a protest of the Coordination Committee voicing its grievance for the benefit of its members and even if such a move on the part of the Coordination Committee was wrong and even if its agitation was influenced by foul play in projecting that exhibiting dubbed TV serial would affect their prospects of getting further work, that by itself would not become a competition issue covered by the Act. Challenging the aforesaid view of the Tribunal, Mr. Chandhiok, learned senior advocate appearing for the CCI, referred to the various provisions of the Act and also extensively read out from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Competition Act of 2002, as amended in 2007 and 2009, deals with anti- trust issues, viz. regulation of anti-competitive agreements, abuse of dominant position and a combination or acquisition falling within the provisions of the said Act. Since the majority view of the CCI also accepted that the impugned activities of the Coordination Committee did not amount to abuse of dominant position, and it treated the same as anti- competitive having appreciable adverse effect on competition, our discussion would be focused only on anti-competitive agreements. Section 3 of the Act is the relevant section in this behalf. It is intended to curb or prohibit certain agreements. Therefore, in the first instance, it is to be found out that there existed an 'agreement' which was entered into by enterprise or association of enterprises or person or association of persons. Thereafter, it needs to be determined as to whether such an agreement is anti-competitive agreement within the meaning of the Act. Once it is found to be so, other provisions relating to the treatment that needs to be given thereto get attracted. While inquiring into any alleged contravention, whether by the Commission or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;What is the relevant market in which competition is effected?" Market definition is a tool to identify and define the boundaries of competition between firms. It serves to establish the framework within which competition policy is applied by the Commission. The main purpose of market definition is to identify in a systematic way the competitive constraints that the undertakings involved face. The objective of defining a market in both its product and geographic dimension is to identify those actual competitors of the undertakings involved that are capable of constraining those undertakings behaviour and of preventing them from behaving independently of effective competitive pressure. Therefore, the purpose of defining the 'relevant market' is to assess with identifying in a systematic way the competitive constraints that undertakings face when operating in a market. This is the case in particular for determining if undertakings are competitors or potential competitors and when assessing the anti-competitive effects of conduct in a market. The concept of relevant market implies that there could be an effective competition between the products which form part of it and thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t product market. Bearing in mind the aforesaid considerations, we concur with the conclusion of the Tribunal. It is the notion of 'power over the market' which is the key to analysing many competitive issues. Therefore, it becomes necessary to understand what is meant by the relevant market. This concept is an economic one. In the instant case, the geographic market is the State of West Bengal and to this extent there is no quarrel inasmuch as activities of the Coordination Committee were limited to the said State. The dispute is as to whether relevant market would cover 'broadcast of TV serial' or it would take within its sweep 'film and TV industry of the State of West Bengal'. TV serial in question was produced in Hindi. It was thereafter dubbed in Bangla. When the two channels, namely CTVN+ and Channel 10, decided to broadcast this TV serial in dubbed form, i.e. in Bangla language, this move was opposed by the Coordination Committee and EIMPA. The Tribunal has upheld the minority view of CCI in saying that nature of the information does not show anything which could even be distinctly connected with the whole 'film and television industry in the State of West Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may be observed that majority view of CCI has rejected the plea of the Coordination Committee as well as EIMPA that allowing the dubbed film will take away jobs from Bengali artistes according to CCI: "If the Bengali films and TV serials are preferred over the non-Bengali content as a result of competitive process, ultimately the Bengali artists will get benefited. The protectionist policies which are being followed will not come to the aid of Bengali artistes, if on content they cannot compete. Such policies are anti-thesis of the principles of free market." ]. It is the sweep of the aforesaid action which is to be considered. Even in the perception of the Coordination Committee, telecast of Bengali dubbed version of 'Mahabharat' was going to affect the whole Television and Film Industry. In view thereof, it was hardly a matter of debate as to what would be the relevant market. With this we advert to the central issue that bogs the parties, namely, whether the activities in which the Coordination Committee indulged in can be treated as 'agreement' for the purpose of Section 3 of the Act. At the outset, it may be noticed that the entities which are roped in, whose agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave economic operators determine their commercial policy independently. Competition Law is aimed at frowning upon the activities of those undertakings (whether natural persons or legal entities) who, while undertaking their economic activities, indulge in practices which effect the competition adversely or take advantage of their dominant position. The notion of enterprise is a relative one. The functional approach and the corresponding focus on the activity, rather than the form of the entity may result in an entity being considered an enterprise when it engages in some activities, but not when it engages in others. The relativity of the concept is most evident when considering activities carried out by non- profit-making organisations or public bodies. These entities may at times operate in their charitable or public capacity but may be considered as undertakings when they engage in commercial activities. The economic nature of an activity is often apparent when the entities offer goods and services in the marketplace and when the activity could, potentially, yield profits. Thus, any entity, regardless of its form, constitutes an 'enterprise' within the meaning of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the members who are engaged in the similar or identical business of production, distribution or exhibition of the films. Decision of these two bodies reflected collective intent of the members. When some of the members are found to be in the production, distribution or exhibition line, the matter could not have been brushed aside by merely giving it a cloak of trade unionism. For this reason, the argument predicated on the right of trade union under Article 19, as professed by the Coordination Committee, is also not available. When the lenses of the reasoning process are duly adjusted with their focus on the picture, the picture gets sharpened and haziness disappears. One can clearly view that prohibition on the exhibition of dubbed serial on the television prevented the competing parties in pursuing their commercial activities. Thus, the CCI rightly observed that the protection in the name of the language goes against the interest of the competition, depriving the consumers of exercising their choice. Acts of Coordination Committee definitely caused harm to consumers by depriving them from watching the dubbed serial on TV channel; albeit for a brief period. It also hin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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