PVR Inox's VPF Charge On Filmmakers Prima Facie Violates Competition Act : CCI Orders Probe

The Competition Commission of India (CCI) on September 30 ordered an investigation against multiplex giant PVR Inox for allegedly abusing its dominant position in the film exhibition business by continuing to charge a Virtual Print Fee (VPF) from film producers. The probe was initiated following a complaint filed by The Film and Television Producers' Guild of India, which represents over 170 film producers across the country.VPF is a fee that was originally introduced in the early 2000s to help cinema owners shift from traditional film reels to digital projection systems. In India, this transition was completed by 2014, but producers say the fee continues to be charged even though the original purpose no longer exists. The Guild alleged that this fee, which can go up to ₹27,500 per film per screen, is now acting as a barrier for small and independent producers who cannot afford it, limiting their ability to release films in multiplexes.According to the complaint, PVR Inox is not only continuing to collect this fee but is also applying it in a discriminatory manner. It was alleged that certain big production houses like Yash Raj Films and Viacom 18 were given favorable terms, including a waiver of the fee, while smaller producers were denied similar treatment. The Guild also pointed out that major Hollywood studios no longer pay this fee, giving them an unfair advantage over Indian producers.In its prima facie view, the CCI, in a coram headed by Chairperson Ravneet Kaur and comprising members Anil Agrawal, Sweta Kakkad, and Deepak Anurag, has concluded that there is sufficient evidence to suggest that PVR Inox may be violating the Competition Act.It observed that the company holds a dominant position in the multiplex market, operating the largest number of screens and earning a significant share of box office revenue. The Commission said that charging VPF even after the industry has fully shifted to digital, and doing so selectively, could amount to unfair and discriminatory practices under the law. “Putting such conditions on producers by OP-3 (PVR INOX) for exhibiting their films substantiate the allegation of not only imposing a supplementary obligation of charging VPF without any specific service to producers but also of imposing an unfair condition for exhibiting films. “, it said. “Accordingly, the Commission is of the view that the alleged imposition of supplementary condition on producers by OP-3, is prima facie in violation of the provisions of Section 4(2)(d) of the Act and needs to be investigated by the DG.”, it added. Accordingly, the Commission directed the conduct a full investigation and submit a report within 90 days.However, two other digital equipment providers named in the same complaint, UFO Moviez and Qube Cinema , were let off as similar concerns against them had already been addressed in an earlier case. In Re: The Film and Television Producers' Guild of India Limited v UFO Moviez India Limited and Ors. Click here to read the order

PVR Inox's VPF Charge On Filmmakers Prima Facie Violates Competition Act : CCI Orders Probe

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