New Delhi: The Competition Commission of India (CCI) has levied penalties amounting to ₹2.70 crore on UFO Moviez India Ltd, its subsidiary Scrabble Digital, and Qube Cinema Technologies Pvt Ltd for indulging in anti-competitive practices in the market for leasing digital cinema equipment. The order also includes non-monetary directions aimed at correcting distortions in the market.
UFO Moviez and Qube Cinema were found to be key players in the supply of Digital Cinema Initiatives (DCI)-compliant Digital Cinema Equipment (DCE) on lease or rent to Cinema Theatre Owners (CTOs) across the country.
Following an extensive probe initiated based on complaints from PF Digital Media Services Ltd (now DNEG India Media Services Ltd) and a film producer, the Commission concluded that both companies had abused their dominant position by entering into restrictive lease agreements with CTOs that hampered competition.
“…the ingredients of tie-in arrangement as provided in Section 3(4)(a) of the Act are satisfied. Therefore, the contentions and arguments of OP-1 (UFO Moviez India) in this respect, including that CTOs’ are not being coerced or restrained to procure DCS, which includes delivery of content cannot be accepted,” CCI said.
The watchdog stated that UFO Moviez held around 40% market share, while Qube commanded a 48% share in the DCI-compliant equipment leasing market—together controlling nearly 90% of the space.
The Commission found that both companies:
- Imposed content supply restrictions in lease agreements with CTOs.
- Blocked access to independent post-production service providers.
- Created artificial entry barriers for new or smaller players.
- Engaged in tie-in arrangements, exclusive supply clauses, and refusal to deal, which had an appreciable adverse effect on competition (AAEC).
These practices, as highlighted by the Director General’s investigation, significantly limited the freedom of CTOs to engage with independent post-production firms, adversely affecting market competition.
Accordingly, the Commission has imposed a penalty of ₹1.04 crore on UFO Moviez and Scrabble Digital, and ₹1.65 crore on Qube Cinema.
Modify all existing lease agreements to eliminate anti-competitive content restrictions.
The regulator’s action is expected to create a more level playing field in the post-production and digital cinema equipment segment and prevent dominant entities from leveraging their position to stifle competition.
