The Competition Commission of India (CCI) has ordered an investigation by its director general (DG) into an alleged breach of anti-trust rules by PVR Inox, the largest multiplex chain of India, on a complaint filed by the Film and Television Producers’ Guild of India (Guild).
In the order dated September 30, the CCI observed that there was prima facie violation of competition rules by the multiplex chain in charging Indian film producers a fee for its deployment of digital cinema equipment in its cinemas.
The Virtual Print Fee (VPF), which has existed in India since 2007, was first proposed to be imposed on producers to help the transition of cinemas from the analogue projectors and tools to digital equipment. This was in synch with practices followed in Hollywood in 2005.
The Guild complained to the CCI that although this practice was scrapped around 10 years later in Hollywood once the digital transition was complete, producers in India are still forced to pay VPF even though the transition is long over. Basis this, the Guild made its case against PVR (now PVR Inox).
The CCI has asked its DG to investigate the matter and submit a report within 90 days. It has also asked the DG to investigate the role of persons who may have been responsible for PVR Inox’s alleged anti-competitive conduct.
The Guild has also underlined that Hollywood studios are not liable to pay VPF to PVR Inox for releasing their films in India, but Indian producers are.
