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17 May 2018
By way of a December 29 2017 order, the Competition Commission of India (CCI) initiated an investigation into Star India Pvt Ltd for an alleged violation of Section 4(2)(a)(ii) of the Competition Act 2002 following claims filed by a private multi-system operator (MSO) engaged in the business of cable TV distribution in the state of Kerala.
Claimant Thiruvananthapuram Entertainment Network (P) Ltd alleged that Star India had engaged in anti-competitive behaviour and abused its dominant position by charging the claimant excessive licence fees compared with the fees that it had charged the claimant's competitors and other Kerala MSOs, including:
Thiruvananthapuram submitted evidence that on July 1 2014 it had entered into an agreement with Star India for subscription to 19 of its 39 channels, under which the licence fee was Rs111,248.12 for around 22,000 connections (approximately Rs5.06 per connection). In comparison, Thiruvananthapuram claimed that KCCL, which had 25 connections, was paying approximately Rs4.40 per connection during the same period.
On December 28 2015 Thiruvananthapuram executed two six-month licensing agreements in regard to 20 Star India channels, under which the licence fee increased to:
However, during the same periods, KCCL was paying approximately Rs5 per connection.
Further, Thiruvananthapuram claimed that on expiration of the December 28 2015 agreements, Star India forced it to execute a new agreement covering 20 channels at a higher rate of:
Thiruvananthapuram claimed that Star India had threatened to discontinue the major sports and regional channels if these rates were not paid. Therefore, Thiruvananthapuram had no other option and was coerced to enter into the agreement at the higher rates for a further 12 months.
However, by the time the CCI concluded its prima facie review, Thiruvananthapuram had requested to withdraw its complaint on the grounds that Star India had resolved the dispute and agreed to reconsider the tariff rates. Nevertheless, by way of an August 17 2017 order, the CCI rejected Thiruvananthapuram's request on the grounds that CCI inquiries need not be driven by the claimant, and decided to proceed with the matter under its suo motu powers of inquiry.
The CCI ordered the director general to open an investigation into Star India considering the following observations:
For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4249 2525) or email (firstname.lastname@example.org). The Vaish Associates website can be accessed at www.vaishlaw.com.
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