JTHJ VERSUS SOS: CONTROVERSY AJAY DEVGAN DRAGS YRF TO COMPETITION COMMISSION OF INDIA

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Ajay Devgn Films (ADF) has served Yash Raj Films (YRF) a notice and
filed a case against it in the Competition Commission of India for
“abusing its clout to deny ADF its rightful due in the Diwali release of
its Son Of Sardar”. ADF has accused YRF of monopolistic practices by using its dominant position in the market to enter into an arrangement
with the exhibitors that it would give them Ek Tha Tiger only if the exhibitors agreed to give its (YRF) Diwali release, Jab Tak Hai Jaan, prominence over others. The Competition Commission of India is a state body responsible for
enforcing the Competition Act 2002, which prevents activities that
have an adverse effect on competition. The Act prohibits anti-
competitive agreements, abuse of dominant position by enterprises
and regulates combinations, which cause or are likely to cause an
appreciable adverse effect on competition.

THE FULL STORY:

According to the lawyer of ADF:
“The case of ADF is that producer/distributor/exhibitor cannot be
allowed to enter into a tie-in arrangement which adversely affects
competition. YRF has entered into a tie-in arrangement with the
exhibitors in a manner that it has made it compulsory for the
exhibitors to exhibit its Jab Tak Hai Jaan on Diwali day and two weeks thereafter with all four shows. A tie-in arrangement in the
present circumstances of YRF of compulsory showing JTHJ on a date fixed in advance with the exhibitor while entering into an
arrangement to show the film Ek Tha Tiger itself violates the provisions of the Competition Act, 2002, more particularly Section 3 of
the Act. It is a well-known fact that YRF is the most dominant player in
the film business for the past four-five decades.
“YRF is vertically integrated i.e. it has a studio, production house, in-
house director, all the equipments required for the production and it
has distribution arms all over the world, which creates a dominant
presence/impression before an exhibitor. “Under the threat of not delivering Ek Tha Tiger, which was the only film to be released on Eid/Independence day (an unusual day being a
Wednesday for a film release), YRF forced the exhibitors to tie-in the
release of JTHJ on the Diwali day i.e. 13-11-2012 which is also an unusual day for release i.e. Tuesday. ADF is entitled to release its movie
on the Diwali day which right is protected under Article 19(1)(g),
Indian Contract Act and Competition Act, 2002 and provide effective
competition to YRF’s movie. “But for YRF’s tie-in arrangement with the exhibitors, which is
apparent from the various agreements executed by YRF, ADF would
have achieved single-screen exhibitors in the range of more than
1,200. However, because of the tie-in arrangement, ADF has achieved
only about 600 nos. of single-screens which clearly shows the cause
against YRF. “To substantiate the above through some examples, a catchment like
Dadar in Bombay has seven single-screen cinemas out of which Son Of Sardaar has only one, and Jab Tak Hai Jaan has six. In Hyderabad city, out of 17 single-screen (Hindi film-playing) cinemas, Son Of Sardaar has only two, and Jab Tak Hai Jaan has 15. The trend is similar almost all India, which can be scrutinised by anyone. “For ADF’s last movie i.e. Bol Bachchan, ADF had achieved about 1,350 number of single-screens which film was released on 6th July, 2012.
ADF could have also restricted the release of YRF’s movie on Diwali day
by entering into tie-in arrangements then but ADF has always been
fair and, in any case, does not carry dominance which YRF has in the
market to dictate anti-competitive terms. “YRF is trying to hide behind its dominant position in the film market.
It is wrongly touting this cause of action to be based upon an alleged
enmity between Mr. Ajay Devgan and Mr. Shah Rukh Khan, which does
not exist. The case of ADF is legally maintainable and ADF shall fight till
the end on this legal issue.”

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