Today’s post is the first in 2015 from my friend in India, Avinash Amarath.

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I wish all readers of Cartel Capers a very happy and prosperous new year. There are two items to report for the first India post of the New Year.

Film Distributor Trade Association fined for price fixing and collective boycott

In its last reported decisions of 2014, the Competition Commission of India (CCI), in two separate cases, fined the Film Distributors Association of Kerala (a state in India) 5% of its turnover (in each case) for indulging in price fixing and collective boycott respectively. The business chain for films in India broadly comprises producers, distributors and exhibitors (i.e. cinema halls and multiplexes).

In one case based on a complaint from a film exhibitor, the CCI found that the association had imposed a revenue sharing pattern on all its members thereby not allowing film exhibitors to negotiate independently with the individual distributors of the association. The association had enforced its decision by stopping screening of all movies in cinema halls that did not accept its terms and by imposing fines on members who did not implement its terms.

In the other case based on a complaint from a member of the association itself, the CCI found that the association had issued a circular calling for collective boycott of two film producers. Again, the association had enforced its decision by imposing monetary penalties and suspending members who violated its decision.

Apart from the fine on the association, the CCI also decided to impose fines on the individual office bearers of the association at the time of the anti-competitive conduct. Separately, the CCI has also decided to initiate proceedings against these office bearers for non-cooperation in the investigation process of the Director General (DG).

An interesting takeaway from these decisions is that the CCI, while deciding on the fine to be imposed on the association, took into account the association’s new office bearers’ cooperation and compliance with the DG’s investigation as a mitigating factor.

The full decisions of the CCI can be found at the following links:

http://www.cci.gov.in/May2011/OrderOfCommission/27/622012.pdf

http://www.cci.gov.in/May2011/OrderOfCommission/27/322013.pdf

Banks found to have not colluded[1]

Bob had already covered this item very well last week. So I am going to just add a few more thoughts to what Bob has already covered. The basic principle that parallel behavior by itself cannot constitute evidence of an agreement has now become a well established principle of Indian competition law with both the CCI and the Competition Appellate Tribunal (COMPAT) adopting this baseline principle in several cases. In fact in the Tyres decision, the CCI observed that in oligopolistic markets, a distinction had to be made between parallelism stemming from an anti-competitive cartel agreement and rational conscious parallelism stemming from the interdependence of firms’ actions.

The Tyres decision is available here: http://www.cci.gov.in/May2011/OrderOfCommission/202008.pdf

Avinash can be reached at  [email protected]

[1]  To be more precise, the Order of the CCI stated “There is nothing on record to even prima facie persuade the Commission that the alleged agreement has been arrived at by the Opposite Parties in concert.”   http://www.cci.gov.in/May2011/OrderOfCommission/262/812014.pdf