New Delhi: Competition Commission of India (CCI) today imposed Rs 2.83 crore penalty on Super Cassettes Industries, known as ‘T-Series’, for unfair business practices with regard to licensing of Bollywood music to private FM radio stations.
Passing the final order on a complaint filed by HT Media Ltd, the regulator said Super Cassettes Industries Ltd abused its dominant position in the relevant market.
The penalty of Rs 2.83 crore translates to eight per cent of Super Cassettes’ average turnover of three financial years starting from 2008-09 fiscal.
The Competition Commission of India (CCI) found “Super Cassettes Industries to be in dominant position in the relevant market of licensing of Bollywood music to private FM radio stations for broadcast in India, according to an official release.
In its 93-page order, the Commission said Super Cassettes violated competition norms by imposing unfair conditions of Minimum Commitment Charges (MCC) upon the private FM stations in its existing agreements.
Besides directing it to cease and desist from anti- competitive practices, the watchdog has asked Super Cassettes to modify the unfair condition of MCC imposed on private FM Stations in the agreements within three months.
“… it is unacceptable for a dominant enterprise to impose such unfair/ discriminatory conditions in licensing of their content,” the order said.
In compliance with an earlier Delhi High Court ruling, the Commission said its order would remain “remain stayed for a period of one week from the receipt thereof by the opposite party (Super Cassettes) to enable it to approach the appropriate forum for grant of relief, if any”.
For this case, the Commission has considered ‘market for licensing of Bollywood music to private FM radio stations for broadcast in India’ as the relevant one.
Super Cassettes, known under the brand name ‘T-Series’, is into manufacture, production and publication of music as well as videos. The entity offers its repertories of music to television channels, radio stations and mobile companies for use and broadcast.
A leading media group, HT Media currently operates ‘Fever 104’ FM radio station in Delhi, Mumbai, Kolkata and Bengaluru. It largely plays Bollywood film music.
“The data gathered during the investigation has revealed that none of the competitors of the opposite party are comparable in terms of size and importance. The revenue of the opposite party is 4-5 times of its nearest competitors,” the order said.
In terms of the number of Bollywood films acquired by the Super Cassettes in a year, the Commission said none of its competitors have been able to acquire more than 10-11 films annually.
“Thus, in terms of relevant market, the opposite party (Super Cassettes) is in such a position that no competitor is able to demand the terms and conditions for sale of its music to FM channels,” it noted.
The Minimum Commitment Charges (MCC) — irrespective of whether it is 30 or 50 per cent — imposed on private FM radio stations is “exploitative and exclusionary in nature”, the regulator said.
Noting that such practice is exploitative, the Commission said the imposition of MCC has an anti-competitive effect as it forecloses other competitors from a substantial share of the market.
Source: Economic Times