2 Oct 2023 10:00 AM GMT
The Competition Commission of India (‘CCI’) comprising Ravneet Kaur (Chairperson) and Sangeeta Verma (Member) closed the complaint filed by Sobhagaya Media Pvt. Ltd. (‘Informant’) against DEN Networks Ltd. (‘OP’) alleging contravention of provisions of Section 3 and Section 4 of the Competition Act, 2002 ('Act'). The CCI held that there is no contravention of the Act...
The Competition Commission of India (‘CCI’) comprising Ravneet Kaur (Chairperson) and Sangeeta Verma (Member) closed the complaint filed by Sobhagaya Media Pvt. Ltd. (‘Informant’) against DEN Networks Ltd. (‘OP’) alleging contravention of provisions of Section 3 and Section 4 of the Competition Act, 2002 ('Act').
The CCI held that there is no contravention of the Act since several MSO’s operate in Uttar Pradesh with minimal entry barriers and no dominance is established by the conduct of the OP.
The Informant, a cable TV service provider operating a news channel called 'APN.' Enters into an one-year agreement with Uttar Pradesh as the defined territory with OP, an intermediary and distributor of channels from different broadcasters. OP was responsible for carrying the Informant's channel on its Digital Addressable Networks.
The Informant requested to align its excessive carriage fee as per consultation paper on Draft Telecommunication (Broadcasting and Cable Services) Interconnection (Addressable Systems) Regulations in 2016 by Telecom Regulatory Authority of India (TRAI) and later upheld by the Madras High Court as well as Supreme Court. However, it orally assured the adjustment of the excess amount in the third year by providing free signals for one year. Based on the assurance, the Informant made payments and agreed to extend the agreement orally.
The Informant argued that asked OP for refund of excess payments, the non-execution of a written agreement, poor signal quality for APN, and reminders about the revision of carriage fees following the TRAI notification. However, to no avail. The Informant accused OP of violating several provisions of Section 4 of the Act and as its conduct amounted to a constructive refusal to deal by treating APN News differently and excluding it, thus violating Section 3(4)(d) of the Act.
Contentions of OP:
OP asserted that the Informant was invoiced as per the four-channel placement agreements executed. However, it made only partial payments for which OP issued a demand notice to the Informant and filed Broadcasting Petition before Telecom Disputes Settlement Appellate Tribunal (TDSAT) which is still pending leading to Forum Shopping by Informant.
Further, OP stated that the channel placement fees are determined by various factors, including the channel's popularity, position, neighboring channels, reach, and obligations specified in the broadcaster's Reference Interconnect Offer (RIO) for pay channels. OP emphasized that Informant never complained about service quality or placement fees. These concerns only arose after the Broadcasting Petition was filed.
OP also argued that Informant is comparing the fees charged for Pay Channels, while their channel is free to air. Moreover, the the TRAI Notification relied upon by Informant relies is not applicable to the case as the nature of the agreement between the parties (Placement Agreement) differs from the one regulated by the notification (Carriage RIO). Secondly, the carriage fee regulation of 2017 came into effect in February 2019. In conclusion, OP asserted that it is not dominant in the market as other competing Multiple System Operators (MSOs) in the Broadcasting and Cable industry exist.
Observations of the Commission:
The CCI closed the case and defined the relevant market to examine OP’s dominance and conduct in the market. It held that Cable TV services are distinct and not interchangeable with other TV transmission platforms like DTH or IPTV. Cable operators can offer additional services like broadband and voice, unlike DTH providers. Competition in cable TV operates on a regional basis, whereas DTH services are national. Given these factors, the relevant geographic market is the State of Uttar Pradesh, specifically the cable TV service market.
Regarding dominance, there's no evidence to suggest OP’s dominance in the cable TV service market in Uttar Pradesh. Several MSOs operate in the state, and there are minimal entry barriers, indicating a lack of dominance. Even if we consider cable TV and DTH services as substitutes in a broader market, OP’s market power is still weak due to the presence of multiple players. In the absence of dominance, there's no case of contravention of Section 4 of the Act.
In conclusion, on the allegation of charging excessive carriage fees, the Informant has not provided evidence to support their claims and did not respond to OP's rebuttal. Therefore, there is no case for contravention of either Section 3(4) or Section 4 of the Act against OP.
Case Title: Sobhagaya Media Pvt Ltd. vs. DEN Networks Ltd
Case No.: Case No. 11 of 2023
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