CCI penalises UFO Moviez, Qube Cinema for anticompetitive conduct

The Competition Commission of India (CCI) on Wednesday said it has imposed monetary and non-monetary sanctions on digital cinema equipment supplier UFO Moviez India and its arm Scrabble Digital, and Qube Cinema Technologies for anticompetitive tie-in arrangements and agreements.

The antitrust regulator has slapped a penalty of Rs 1.04 crore on UFO Moviez and Scrabble, and almost Rs 1.66 crore on Qube, it said in a statement. Qube is also a supplier of digital cinema equipment.

“The Commission found that UFO Moviez and Qube, through imposition of restrictions on supply of content in lease agreements entered into with CTOs (cinema theatre owners), created barriers for players engaged in the provision of post-production processing services,” the regulator said in a statement.

They also “blocked a significant number of cinema theatre owners” having digital cinema equipment that are compliant with the standards of Digital Cinema Initiatives--a producers’ association--from being served by any other player, as per the statement.

The regulator found UFO Moviez, Scrabble and Qube in contravention of the Section 3(4) of the Competition Act. This section essentially deals with pacts among enterprises or persons at different levels of the production-chain in different markets, including tie-in arrangements and exclusive supply or distribution agreements.

The regulator directed UFO Moviez and Qube “to not re-enter lease agreements with the cinema theatre owners imposing restrictions on supply of content from other parties”.

Existing lease agreements with cinema theatre owners stand modified “such that they don’t impose restrictions on supply of content from parties other than UFO Moviez (and its affiliates) and Qube”, the CCI said.