CCI orders probe against Star for alleged abuse of dominant position in Kerala
MUMBAI: Fair trade regulator Competition Commission of India (CCI) has ordered a probe against Star India for alleged abuse of dominant position in the TV broadcasting market in Kerala.
The probe was ordered following a probe by a multi system operator (MSO) Thiruvananthapuram Entertainment Network (TEN). The MSO has around 22,000 customers in Kerala.
The commission directed the Director General (DG) to cause an investigation into the matter to ascertain whether Star has indulged in contravention of the provisions of Section 4 (2) (a) (ii) of the Act in the market.
The DG has been directed to complete its investigation within a period of 60 days from the receipt of this order and submit its report to the Commission forthwith.
It also made it clear that, if during the course of the investigation, the DG comes across any other conduct of the broadcaster in addition to that mentioned in the information, which it finds to be in contravention of the provisions of the Act, the DG shall investigate the same as well.
Also, the DG has also been directed to conduct a detailed investigation without restricting and confining itself to the duration mentioned in the information.
The commission has also directed an investigation into the role, if any, of any individuals/officials of the broadcaster who might have been in-charge of and responsible for the conduct of the business of the Opposite Party, at the time of alleged contravention.
According to the complaint filed by the MSO, the broadcaster is discriminating between MSOs by charging different rates for providing content. Star, the MSO said, is charging more from it for the same content that is being provided at a lower rate to other MSOs.
It further alleged that the broadcaster is giving carriage fee to other MSOs to have its channels in all categories as number 1 on the EPG.
It also stated that the broadcaster is also discriminating by entering into longer duration contracts with bigger MSOs while only signing six month contracts with the informant.
The MSO has urged the commission to initiate an inquiry against the broadcaster for contravention of the provisions of Sections 3 and 4 of the Act and pass an appropriate direction.
The commission observed that the agreements are not entered into between parties who are engaged in identical or similar trade of goods or provision of services but rather between broadcaster and distributors, they would not fall within the scope of Section 3 (3) of the Act.
The commission has chosen Kerala as the relevant market to ascertain the allegation of abuse of dominant position.
After obtaining information on the market share, the commission ascertained that Star is in a position of dominance in relevant market with 40-50% share of the viewership.
However, Star in its response contended that the provision of the competition act only requires dominant entities to treat similarly placed customers equally. It further argued that the rates for similarly placed MSOs are the same. It also placed the details of its agreement with one entity called Athulya Media.
However, the commission found the information submitted by Star to be insufficient. Also it didn’t provide details of its agreement with KCCL.
On the issue of the jurisdiction, the Commission is of the view that in this matter, its jurisdiction is complementary with that of the Telecom Regulatory Authority of India (TRAI).