Competition Commission probes PVR Inox after 'Jolly LLB 3'-VPF controversy
What's the story
The Competition Commission of India (CCI) has launched an investigation into PVR Inox for allegedly misusing its position by continuing to charge film producers a Virtual Print Fee (VPF). The order, issued earlier this week, comes nearly two weeks after this issue temporarily halted advance bookings for Jolly LLB 3 in PVR and Inox. The Film and Television Producers' Guild of India had filed the complaint against the multiplex chain.
Allegations
Guild claims VPF adds burden on small, medium producers
The Guild, which represents almost 170 producers, alleged that the VPF was a temporary measure introduced in the mid-2000s to facilitate the transition from analog to digital cinema projectors. They stated that although Hollywood producers stopped paying VPF after 2018, Indian theaters still charge it more than ten years after theater digitization. The Guild argued that this ongoing charge unfairly burdens small and medium-sized producers.
Investigation focus
Investigation ordered into potential violations by PVR
The Guild noted that almost 70% of Hollywood releases faced no VPF charges, whereas Indian producers were routinely billed. This conduct is potentially violative of Section 4(2)(a) of the Competition Act, which prohibits imposing unfair and discriminatory conditions. The CCI has now ordered its Director General to conduct a detailed investigation into PVR's practices and submit a report within 90 days.
Dismissal of charges
Charges against UFO, Qube dismissed
The CCI has dismissed charges against UFO Moviez India and Qube Cinema Technologies. The complaint alleged that these companies locked exhibitors into exclusive contracts and collected VPF without providing corresponding services. However, the CCI observed that these concerns had been addressed in a 2020 order (Case No. 11 of 2020) and therefore chose to close the case against them under Section 26(2A) of the Competition Act.