Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): In a significant decision, the coram of Ashok Kumar Gupta (Chairperson), Sangeeta Verma and Bhagwant Singh Bishnoi (Members), in view of the negative impact of exclusive and restrictive agreements between online ticketing platforms and single screen cinemas/ multiplexes on the relevant market; held that there is a prima facie case owing to the conduct of ‘BookMyShow that requires investigation by the Director General (DG) to determine whether their conduct of has resulted in contravention of the provisions of S. 4 (abuse of dominant position) of Competition Act, 2002. 

 

Background of the case: Showtyme an online movie ticketing portal was launched in November 2021 in order to provide an alternative option to the cine-goers in Hyderabad (later across India) to book their movie tickets online, by paying a convenience fee of ₹11/- per ticket; which is stated to be 40-50% less than the existing players. On the other hand, BookMyShow, a popular online movie ticketing portal, holds at least 90% market share in movie ticket booking industry in India.  

 

The informant in the instant matter, is a social activist and the founder of Showtyme, who alleged that BookMyShow has formed an explicit cartel with multiplexes and theatres and pursuant to which, it has signed exclusive agreements with them in order to thwart any opportunity to other platforms to sell tickets of cinema, even at 50 % lesser convenience fee than that of BookMyShow, thereby controlling the movie ticketing industry and imposing barriers for new entrants like Showtyme 

 

Contentions 

  • It was submitted the informant that BookMyShow has abused its dominant position under S. 4 of the Competition Act, by imposing unfair and discriminatory conditions on the theatres/ multiplexes i.e., making them sign contracts for sale of 100% tickets on its platform.  
  • It was further submitted that BookMyShow is entitled to charge the consumers convenience fee for online booking of tickets; however, entering into agreements with theatres/multiplexes to not sell the movie tickets online to anyone else; giving lakhs and crores of rupees on loans at zero interest to the Opposing Parties; and selling more than 50% tickets of movies online; such acts leaves no scope for the new entrants to enter into the market and thereby creating a hostile effect upon fair competition. 
  • The informant also put forth before the Commission that he submitted various complaints to licensing authorities and other authorities in the State of Telangana and has also given a representation to the Ministry of Consumer Affairs, Government of India.     

 

Per contra, BookMyShow argued that-  

  • It is an intermediary engaged in the activity of facilitating online booking of tickets for movies, plays, concerts, sports events across India through its mobile application and website and follows a standard form of contract and commercial terms. The duration of the agreements with each cinema/ theatre/ multiplex is negotiated as per their requirement. It is entitled to charge convenience fee from customers for facilitation of booking of tickets through its mobile app and website.  
  • BookMyShow also contended that the informant approached the Commission with “unclean hands” as he filed the information even before the launch of Showtyme’s website. As per BookMyShow, the website should have been in operation for at least a certain amount of time to experience the competition in the market from various players. Thus, the question of causing harm to Showtyme does not arise.  
  • Regarding the allegations of exclusivity, it was stated that BookMyShow is a relatively new entrant in the relevant market; therefore, in order to penetrate this market BookMyShow had to tie-up with certain cinema theatres on an exclusive basis. This exclusivity also benefits the cinema theatres that have tied up with BookMyShow as otherwise they do not have the resources to make the tickets available online through their own website or other modes. It was further contended that allegations of creating entry barrier are misleading as the market is still evolving and volatile in nature. It was stated that various participants like PayTM have entered the market and established a significant presence. 
  • It was stated that BookMyShow does not provide any monetary assistance in return for exclusivity. In certain cases, it only provides some security deposit to adjust the ticket price and revenue share to the cinema theatres.  

 

Observations: Perusing the facts and the allegations levied upon BookMyShow, the Commission duly noted that the grievance of the informant centered around the agreement and arrangement between BookMyShow and certain theatres/ multiplexes in the city of Hyderabad, thereby allegedly preventing him from offering the services of his website Showtyme for online booking of tickets.   

  • While determining “relevant market” for the instant matter, the Commission noted that relevant product market comprises of all those products or services which are regarded as interchangeable or substitutable by consumers, by reason of their characteristic, price and intended use. Therefore, the most important parameter is as to how the consumers or users of products or services perceive substitutability or interchangeability amongst provision of services. The Commission noted that the services of online platforms like BookMyShow are available pan-India and the platform faces similar competitive constraints and homogeneous conditions of competition throughout India. Thus, the relevant market in the present case was that of ‘market for online intermediation services for booking of movie tickets in India’.
  • The Commission pointed out that BookMyShow had not provided data on its market share for the online intermediation services for booking of movie tickets in India rather they provided the number of tickets sold, indicating total yearly footfalls and not value of tickets in INR crores, which is apparently untenable and inconsistent for computation of market share of BookMyShow even in the wider market proposed by it. The Commission stated that it is not inclined to rely upon such figures.  
  • Regarding BookMyShow’s dominant position, the Commission observed that market share is one of the many factors that are considered in the assessment of dominance. In the instant case, market share of the platform needs to be seen in conjunction with its reach, scale and the network effects that work in its favour, leading to huge consumer footfalls thereby making presence on the platform critical for visibility and competitive ability of cinema theatres. The ability of BookMyShow to enter into exclusive agreements corroborates its position of strength and the various provisions in its agreements with cinema theatres/multiplexes, indicate its superior bargaining power in deciding contractual terms. These factors, taken together, prima facie appear to substantiate the dominant position enjoyed by BookMyShow in the relevant market of online intermediation services for booking of movie tickets in India. 
  • The Commission also pointed out that BookMyShow’s exclusive agreements have the potential to reduce competition in the relevant market, as they may make rival intermediary platforms or new entrants incur significant additional cost to induce the cinemas to give up their exclusive contracts with the leading platform with market power. The exclusive and restrictive agreements with single screen cinemas and multiplexes, in conjunction, prima facie appear to have the potential of denying market access to competing platforms and potential entrants. The cinema theatres as well as the cinegoers alike are restricted in their choice of alternate ticketing platforms, during the working of the contracts that BookMyShow has with large number of theatres/ multiplex chains”.  
  • Upon perusal of the exclusive agreements with single screen cinemas, the Commission also pointed out that BookMyShow has reserved the right of data collection, ownership and storage; without the cinemas having any right, title, interest to such data; even though in the agreements there is provision for sharing of data. 

 

Decision: With the aforementioned observations, the Commission was of the view that exclusivity relating to data ownership can increase the bargaining power of the platform over time. Data further strengthens and entrenches the network effects limiting inter platform competition. In a dynamic sense, this would imply that BookMyShow would earn monopoly rents, going forward. The aspect of exclusive ownership of and access to data by a dominant intermediary, merits investigation”. 

The Commission was of the view that there exists a prima facie case regarding BookMyShow’s conduct which should be investigated by the Director General under the provisions of S. 26(1) of the Competition Act. The Commission also directed the DG to complete the investigation and submit the investigation report within a period of 60 days from the receipt of this order.    

[Vijay Gopal v. Big Tree Entertainment Pvt. Ltd., 2022 SCC OnLine CCI 36, decided on 16-06-2022]  


*Sucheta Sarkar, Editorial Assistant has reported this brief.

Case BriefsCOVID 19High Courts

Bombay High Court, Nagpur: The Division Bench of Sunil B. Shukre and Anil L. Pansare, JJ., addressed a petition wherein a grievance was filed stating that an unreasonable classification resulting in impermissible discrimination had been made by the respondents as Cinema Halls, Theaters, Malls, Restaurants and also other establishments have been permitted to carry on their business or operations with 50% capacity of the customers or attendees, provided customers or attendees are armed with two doses of vaccination, and whereas, Mangal Karyalaya/ Banquet Halls and Lawns where marriage functions are held and solemnised are not being permitted to carry on their business and operations with the same capacity of persons who have taken both the doses of vaccination.

High Court issued notice for next date of hearing on 16-2-2022.

Though, Addl. G.P. and the Advocate for respondent 2, submitted that recently Collector, Nagpur had sent a proposal to the Principal Secretary, Disaster Management, Relief and Rehabilitation Department, Mumbai on 10-2-2022 recommending several relaxations in the restrictions imposed earlier on account of Covid-19 Pandemic and therefore, according to them, this petition has been prematurely filed. [Mangal Karyalaya & Lawn Assn. v. State of Maharashtra, 2022 SCC OnLine Bom 303, decided on 11-2-2022]


Advocates before the Court:

Shri Shyam Dewani, Advocate for Petitioners.

Shri S.S. Doifode, Addl.G.P. for Respondent Nos. 1 & 3. Shri S.M.Puranik, Advocate for Respondent No.2.

COVID 19Fact ChecksNews

SOP on preventive measures to be followed in Entertainment Parks and similar places to contain the spread of COVID-19.

Background

Entertainment Parks and similar places are frequented by a large number of people for leisure and entertainment. To prevent spread of COVID-19 infection, it is important that required physical distancing and other preventive measures are followed in these places.

Promoting COVID appropriate behaviour

Simple public health measures are to be promoted to reduce the risk of spread of COVID-19 infection. These measures are to be observed by all (staff and visitors) in these places at all times.

These include:

i. Physical distancing of at least 6 feet to be followed as far as feasible.

ii. Use of face covers/masks to be made mandatory.

iii. Practice frequent hand washing with soap (for at least 40-60 seconds) even when hands are not visibly dirty. Use of alcohol-based hand sanitizers (for at least 20 seconds) can be made wherever feasible.

iv. Respiratory etiquettes to be strictly followed. This involves strict practice of covering one’s mouth and nose while coughing/sneezing with a tissue/handkerchief/flexed elbow and disposing off used tissues properly.

v. Self-monitoring of health by all and reporting any illness at the earliest to State or District helpline.

vi. Spitting shall be strictly prohibited.

vii. Installation & use of Aarogya Setu App shall be advised to all.

Protecting the vulnerable population

i. Persons above 65 years of age, persons with comorbidities, pregnant women and children below the age of 10 years are advised to stay at home. Entertainment Park management to advise its clients accordingly.

ii. Employees who are at higher risk i.e. older employees, pregnant employees and employees who have underlying medical conditions must take extra precautions. They should preferably not be exposed to any front-line work requiring direct contact with the public.

Providing and maintaining healthy environment at Entertainment Park and similar places

i. Prior to resumption of activities, all work areas, public utility areas and open spaces (including but not limited to rides, museums, gardens, food courts, gift shops, theatres, etc.) shall be sanitized with 1% Sodium Hypochlorite solution. Thereafter this will be done on a regular basis.

ii. Cleaning and regular disinfection (using 1% Sodium Hypochlorite solution) of frequently touched surfaces (door knobs/handles, elevator buttons, hand rails, slides, chairs, tabletops, benches, washroom fixtures, etc.) and floors, walls etc. to be done before opening of Entertainment Park, at the end of the day and at other appropriate times.

iii. Provisions to be made for multiple hand washing stations and hand sanitizers for the use of the public. Provision of soap in toilets and hand sanitizers in other common areas in sufficient quantity must be ensured.

iv. Deep cleaning of all drinking and hand washing stations, washrooms, showers and lavatories shall be ensured.

v. Visitors and employees should be advised to dispose of used face covers/masks in separate covered bins placed in common areas.

vi. Swimming Pool (wherever applicable) shall remain closed.

vii. Water themed Entertainment Parks and water rides shall ensure adequate and regular water filtration and chlorination as per laid down standards.

viii. Staggered timing and regulation of physical numbers on these rides be ensured.

ix. Theatres will only allow 50% of seating capacity duly ensuring physical distancing norms.

Planning for operations, scheduling and monitoring of activities

Physical distancing

i. For ensuring physical distancing inside and outside the premises, specific markings on the floor may be made. Similarly, physical distancing shall also be maintained in office areas and common utility areas.

ii. There will be queue management inside and outside the premises. Enough personnel will be deployed to monitor the queue and physical distancing.

iii. Lockers for staff and visitors will remain in use; physical distancing and regular disinfection to be maintained.

Crowd management

i. The crowd density does not remain the same throughout and usually peaks on weekends and holidays. Planning should specifically factor-in requirement for these peak days.

ii. Provision for online tickets must be encouraged.

iii. The tickets sold shall be commensurate with the floor area per person that is required for fulfilling the physical distancing norms. Accordingly, entry to the Entertainment Park shall be regulated.

iv. Entry of visitors with tickets to be monitored to ensure that the number of visitors inside the Entertainment Park at any given time doesn’t exceed the permissible limit.

v. CCTV monitoring shall be ensured to detect crowding at any Rides or Food Court etc.

vi. For those who reach the Entertainment Park without online ticket or where facility of on-line ticketing does not exist, adequate number of ticket counters shall be planned duly ensuring physical distancing norms.

vii. A simple do’s and don’ts Advisory may be distributed at the time of issue of tickets/passes or may be printed on the tickets itself. Do’s and Don’ts also to be displayed at vantage points.

viii. The park management may make suitable provisions for contact-less payment.

Ensuring ventilation

i. As far as feasible, natural ventilation must be ensured and use of small enclosed spaces must be discouraged.

ii. Circulation of outdoor air needs to be increased, as much as possible, by opening windows and doors, using fans, or other methods.

iii. For air-conditioning/ventilation, of closed enclosures, the guidelines of CPWD shall be followed which emphasizes that the temperature setting of all air conditioning devices should be in the range of 24-300C, relative humidity should be in the range of 40-70%, intake of fresh air should be as much as possible and cross ventilation should be adequate. Air handling unit needs to be cleaned prior to switching on.

Making available COVID related supplies

i. Appropriate arrangements for personal protection devices like face covers/masks, and other logistics like hand sanitizers, soap, sodium hypochlorite solution (1%) etc. shall be made available by management for their employees as per requirements.

ii. Provide an adequate supply of calibrated thermal guns.

iii. Ensure availability of covered dustbins and trash cans in sufficient numbers to manage waste as per CPCB guidelines (available at: https://cpcb.nic.in/uploads/Projects/Bio-MedicalWaste/BMW-GUIDELINES-COVID_1.pdf)

Creating awareness

i. The mobile application or web site of the Entertainment Park must display preventive measures for COVID-19.

ii. The website/ Mobile application shall inform the visitors on self-monitoring of health and not to visit the park if suffering from symptoms of Covid-19.

iii. Provisions must be made for display of Posters/standees/AV media on preventive measures against COVID-19 at prominent places in the Entertainment Park.

iv. Recorded messages on precautionary measures and COVID appropriate behaviour may be played.

v. Display State helpline numbers and also numbers of local health authorities at prominent places.

Maintaining Healthy operations

At the entry point and exit

i. Entrance to have mandatory hand hygiene (sanitizer dispenser) and thermal screening provisions.

ii. Multiple gates/separate gates, if feasible, should be used for entry and exit.

iii. Only asymptomatic persons (managerial staff, employees, visitors) to be allowed in the premises.

iv. Management staff, employees and visitors living in containment zones shall not be allowed entry in entertainment park and other similar places.

v. All employees/visitors to be allowed entry only if using face cover/masks. The face cover/mask has to be worn at all times inside the entertainment park.

vi. Staggering of visitors to be done for maintaining physical distancing of a minimum of 6 feet, when queuing up at the time of entry and for rides etc.

vii. Proper queue management shall be followed at the ticket counters, the parking lots, in corridors and in elevators – duly following physical distancing norms shall be organized.

viii. Valet parking, if available, shall be operational with operating staff wearing face covers/ masks as appropriate. Proper disinfection of steering, door handles, keys, etc. of the vehicles should be taken up, before taking over and handing over the vehicle.

Within the premises of the entertainment park complex.

i. Seating arrangement to ensure a distance of 6 feet between chairs, benches, etc.

ii. Staggering of visitors for different rides to be done, to allow for adequate physical distancing.

iii. Number of people in the elevators shall be restricted, duly maintaining physical distancing norms.

iv. Use of escalators with one person on alternate steps may be encouraged.

 During rides

i. Disinfect the commonly touched surfaces of the ride equipment, before commencing the ride.

ii. Visitors shall sanitize their hands before and after using the rides. For such purpose, hand sanitizer should be provided at the entry and exit of ride stations, etc.

iii. Ensure physical distancing in rides.

Activities in common areas – Souvenir Shops, stalls, cafeteria, food courts, changing rooms, showers, etc.

i. Adequate crowd and queue management to be ensured.

ii. In food courts and restaurants, not more than 50% of seating capacity to be permitted.

iii. The seating arrangement should ensure adequate physical distancing.

iv. Food court staff/waiters should wear masks and hand gloves and take other required precautionary measures.

v. Contactless mode of ordering and digital mode of payment to be encouraged.

vi. Tables to be sanitized each time customer leaves.

vii. In the kitchen, the staff should follow physical distancing norms at the workplace.

Reporting of a suspect or confirmed case in the premises:

i. Place the ill person in a room or area isolated from others.

ii. Provide a mask/face cover till such time he/she is examined by a doctor.

iii. Immediately inform the nearest medical facility (hospital/clinic) or call the State or District helpline.

iv. A risk assessment will be undertaken by the designated public health authority (District RRT/treating physician) and accordingly further action be initiated regarding management of case, his/her contacts and need for disinfection.

v. Disinfection of the premises to be taken up if the person is found positive.


NOTE:

  • Theatres to have only 50% seating capacity
  • Swimming Pools to remain closed

Ministry of Health and Family Welfare

[Dated: 08-10-2020]