TMI Blog2017 (3) TMI 1692X X X X Extracts X X X X X X X X Extracts X X X X ..... bargaining and is not engaged in economic activity. In such circumstances, had the Coordination Committee acted only as trade unionists, things would have been different. Then, perhaps, the view taken by the Tribunal could be sustained. The Coordination Committee (or for that matter even EIMPA) are, in fact, association of enterprises (constituent members) and these members are engaged in production, distribution and exhibition of films. EIMPA is an association of film producers, distributors and exhibitors, operating mainly in the State of West Bengal. Likewise, the Coordination Committee is the joint platform of Federation of Senior Technician and Workers of Eastern India and West Bengal Motion Pictures Artistes Forum. Both EIMPA as well as the Coordination Committee acted in a concerted and coordinated manner. They joined together in giving call of boycott of competing members i.e. the informant in the instant case and, therefore, matter cannot be viewed narrowly by treating Coordination Committee as a trade union, ignoring the fact that it is backing the cause of those which are ‘enterprises’ - When some of the members are found to be in the production, distribution or exhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sub-assigner to dub the said serial 'Mahabharat' in Bangla language, which it did. Thereafter, for the purposes of telecasting the said dubbed serial, an agreement was executed for the time slot, on revenue sharing basis, with M/s. Bengal Media Pvt. Ltd., Kolkata, which is the owner of 'Channel 10', as well as with M/s. Calcutta Television Network Private Ltd., Kolkata, which is the owner of CTVN+ Channel. These two channels were given hard disks of four episodes of the serial on 2nd February, 2011 and 12th February, 2011. An advertisement was placed in Daily Newspapers on 19th February, 2011 informing the public at large that serial 'Mahabharat' would be telecast in Bangla on Channel 10 at 10.00 a.m. in the morning and on CTVN+ at 10.00 p.m. every Sunday. Certain producers in Eastern India have formed an association called Eastern India Motion Picture Association (for short, 'EIMPA'). Likewise, the artists and technicians of film and television industry in West Bengal have formed an association known as 'Committee of Artists and Technicians of West Bengal Film and Television Investors (hereinafter referred to as the 'Coordination Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formed a prima facie opinion that acts on the part of EIMPA and Coordination Committee were anti-competitive. Accordingly, matter was assigned to the Director General (DG) for detailed investigation as per the procedure prescribed in the Act. On investigation, the DG found that the details contained in the information supplied by the informant were factually correct. On that basis, he examined the matter in the context of provisions contained in the Act. In order to understand with clarity the task undertaken and accomplished by the DG, we deem it proper to refer to some of the relevant provisions of the Act at this stage. Chapter II of the Act deals with 'prohibition of certain agreements, abuse of dominant position and regulation of combinations'. It comprises of Sections 3 to 6. Section 3 deals with anti- competitive agreements and Section 4 prohibits the abuse of dominant position. Section 5, on the other hand, takes care of those acquisitions and mergers which have the potential to become anti-competitive or attain dominant position, with threat to abuse the said position in order to control such acquisition and mergers. Section 6 empowers the CCI to regulate those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erse effect on competition: Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services. Explanation.-For the purposes of this sub-section, bid rigging means any agreement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding (4) Any agreement amongst enterprises or persons at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provision of services, including- (a) tie-in arrangement; (b) exclusive supply agreement; (c) exclusive distribution agreement; (d) refusal to deal; (e) resale price maintenance, shall be an agreement in contravention of sub-section (1) if such agreement causes or is likely to cause an appreciable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se an appreciable adverse effect on competition within India. Thus, agreements in respect of distribution or provisions of services, if they have adverse effect on competition, are prohibited and treated as void by virtue of sub-section (2). Sub-section (3), with which we are directly concerned, stipulates four kinds of agreements which are presumed to have appreciable adverse effect on competition. Therefore, if a particular agreement comes in any of the said categories, it is per se treated as adversely effecting the competition to an appreciable extent and comes within the mischief of sub-section (1). There is no further need to have actual proof as to whether it has caused appreciable effect on competition. Proviso thereto, however, exempts certain kinds of agreements, meaning thereby if a particular case falls under the proviso, then such a presumption would not be applicable. We have already mentioned in brief the contents of letters which were written by EIMPA and the Coordination Committee to the Channel 10 and CTVN+. The DG was to investigate as to whether this agreement falls within the four corners of Section 3(3)(b) of the Act, namely, whether it limits or controls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising; xx xx xx 2(x) trade means any trade, business, industry, profession or occupation relating to the production, supply, distribution, storage or control of goods and includes the provision of any services; At this stage, we would like to refer to Section 19 of the Act which permits the CCI to conduct an enquiry into certain kinds of agreements and dominant position of enterprise. Sub-section (1) of Section 19 empowers the Commission to inquire into any alleged contravention of the provisions contained in sub-section (1) of Section 3 (i.e. anti-competitive agreements) or sub-section (1) of Section 4 (i.e. abuse of dominant position). Sub-section (3) deals with the factors which have to be kept in mind by the CCI while undertaking an inquiry into anti-competitive agreements and reads as under: 19(3) The Commission shall, while determining whether an agreement has an appreciable adverse effect on competition under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, unjustified. He found that following conduct of the Coordination Committee specifically contravened the provisions of the Act: a. Act of the Co-ordination Committee writing a letter on 18.02.2011 to CCTVN Plus Channel asking it to stop the telecasting of Mahabharata serial. b. Further, act of the Co-ordination Committee writing a letter on 01.03.2011 to Channel 10 and letters on 11.03.2011, 12.03.2011 and 14.03.2011 to CTVN Plus Channel asking them to stop the telecast of Mahabharata serial. c. Observance of one-day work stoppage on 07.04.2011 against telecast of the Mahabharata serial by the members of all the constituents of Co- ordination Committee and demonstration on the same day from 11.00AM to 02.00PM at Rani Rasoni Road in Kolkata. d. The Co-ordination Committee approached Shri Mithun Chakraborty, the leading actor of Indian Film Industry and the Chief Adviser of Channel 10 and finally succeeded in getting the telecast of Mahabharata stopped by Channel 10. The DG concluded that the action on the part of Coordination Committee had resulted in foreclosure of competition by hindering entry into the market. The DG also held that by not allowing the dubbed versi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dubbed serials shown on the said channels. He also found the industry of television channels in Bangla was growing by leaps and bounds and, therefore, argument of the Coordination Committee was not based on facts. Thus, their action was held to be unjustified, as it had resulted in foreclosure on competition by entering into the market as well as foreclosure of business opportunities for the businessmen engaged in the production, distribution and exhibition/telecast of such programmes. This, according to him, came within the mischief of Section 3(3)(b) of the Act. Against the aforesaid report of the DG, being adverse to the Coordination Committee as well as EIMPA, both of them preferred their objections before the CCI. These objections were almost on the same lines which were taken before the DG and, therefore, it is not necessary to repeat the same at this stage inasmuch as we would be turning to the stand of the Coordination Committee at the appropriate stage, in any case. The CCI, after scanning through those objections, formulated two questions which according to it fell for consideration. These are: Issue 1 Whether EIMPA and Co-ordination Committee imposed/attempted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roadcasting service is altogether a separate market, different from production, exhibition and distribution of films. Insofar as the two channels, namely, CTVN+ and Channel 10 are concerned, they were in the market for telecasting programmes for the viewers of the DTH category or Cable TV category and were not in production, distribution or exhibition of dubbed films. According to the minority view, since the offending parties, i,e., Coordination Committee and EIMPA, were not active in the relevant market of broadcast of dubbed TV serials, there was no question of any violation of any provisions of the Act. It was further held that Section 3 of the Act does not take into its fold coercive actions taken by workers' union affecting the various facets or products or service market, affecting production, distribution and supply of goods or services. It was accepted that, as a matter of fact, the Coordination Committee as well as EIMPA had put pressure on these channels from broadcasting the dubbed TV serial in question through various means. However, it could not be treated as an economic pressure. It was an act of trade union putting such pressures which was outside the domain of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity and by their agreement tend to restrict the competition. No evidence to this effect was available in the instant case. It was merely a protest of the Coordination Committee voicing its grievance for the benefit of its members and even if such a move on the part of the Coordination Committee was wrong and even if its agitation was influenced by foul play in projecting that exhibiting dubbed TV serial would affect their prospects of getting further work, that by itself would not become a competition issue covered by the Act. Challenging the aforesaid view of the Tribunal, Mr. Chandhiok, learned senior advocate appearing for the CCI, referred to the various provisions of the Act and also extensively read out from the exercise undertaken by the DG and the majority view of the CCI. His submission was that exercise undertaken by the DG and approved by the CCI in its majority decision was correct in law. He questioned the manner in which 'relevant market' has been assigned limited sphere as, according to him, the matter related to film and television industry of the State of West Bengal and the concerted action of the Coordination Committee was to obviously effect the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppreciable adverse effect on competition, our discussion would be focused only on anti-competitive agreements. Section 3 of the Act is the relevant section in this behalf. It is intended to curb or prohibit certain agreements. Therefore, in the first instance, it is to be found out that there existed an agreement which was entered into by enterprise or association of enterprises or person or association of persons. Thereafter, it needs to be determined as to whether such an agreement is anti-competitive agreement within the meaning of the Act. Once it is found to be so, other provisions relating to the treatment that needs to be given thereto get attracted. While inquiring into any alleged contravention, whether by the Commission or by the DG, and determining whether any agreement has an appreciable adverse effect on competition under Section 3, factors which are to be taken into consideration are mentioned in sub-section (3) of Section 19, which are as follows: 19. Inquiry into certain agreements and dominant position of enterprise. xx xx xx (3) The Commission shall, while determining whether an agreement has an appreciable adverse effect on competition under section 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arket in both its product and geographic dimension is to identify those actual competitors of the undertakings involved that are capable of constraining those undertakings behaviour and of preventing them from behaving independently of effective competitive pressure. Therefore, the purpose of defining the 'relevant market' is to assess with identifying in a systematic way the competitive constraints that undertakings face when operating in a market. This is the case in particular for determining if undertakings are competitors or potential competitors and when assessing the anti-competitive effects of conduct in a market. The concept of relevant market implies that there could be an effective competition between the products which form part of it and this presupposes that there is a sufficient degree of interchangeability between all the products forming part of the same market insofar as specific use of such product is concerned. While identifying the relevant market in a given case, the CCI is required to look at evidence that is available and relevant to the case at hand. The CCI has to define the boundaries of the relevant market as precisely as required by the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this extent there is no quarrel inasmuch as activities of the Coordination Committee were limited to the said State. The dispute is as to whether relevant market would cover broadcast of TV serial or it would take within its sweep film and TV industry of the State of West Bengal . TV serial in question was produced in Hindi. It was thereafter dubbed in Bangla. When the two channels, namely CTVN+ and Channel 10, decided to broadcast this TV serial in dubbed form, i.e. in Bangla language, this move was opposed by the Coordination Committee and EIMPA. The Tribunal has upheld the minority view of CCI in saying that nature of the information does not show anything which could even be distinctly connected with the whole 'film and television industry in the State of West Bengal'. The information is only against showing the dubbed serial on the television and it has no relation whatsoever with production, distribution, etc. of any film or any other material on the TV channels. We feel that this is a myopic view taken by the Tribunal which ignores many other vital aspects of this case, most important being the width of the effect of the aforesaid cause on which the agitation w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g followed will not come to the aid of Bengali artistes, if on content they cannot compete. Such policies are anti-thesis of the principles of free market. ]. It is the sweep of the aforesaid action which is to be considered. Even in the perception of the Coordination Committee, telecast of Bengali dubbed version of Mahabharat was going to affect the whole Television and Film Industry. In view thereof, it was hardly a matter of debate as to what would be the relevant market. With this we advert to the central issue that bogs the parties, namely, whether the activities in which the Coordination Committee indulged in can be treated as 'agreement' for the purpose of Section 3 of the Act. At the outset, it may be noticed that the entities which are roped in, whose agreements can be offending, are enterprise or association of enterprises or person or association of persons or where the agreement is between any person and an enterprise. The expression 'enterprise' may refer to any entity, regardless of its legal status or the way in which it was financed and, therefore, it may include natural as well as legal persons. This statement gets further strengthened as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional approach and the corresponding focus on the activity, rather than the form of the entity may result in an entity being considered an enterprise when it engages in some activities, but not when it engages in others. The relativity of the concept is most evident when considering activities carried out by non- profit-making organisations or public bodies. These entities may at times operate in their charitable or public capacity but may be considered as undertakings when they engage in commercial activities. The economic nature of an activity is often apparent when the entities offer goods and services in the marketplace and when the activity could, potentially, yield profits. Thus, any entity, regardless of its form, constitutes an 'enterprise' within the meaning of Section 3 of the Act when it engages in economic activity. An economic activity includes any activity, whether or not profit making, that involves economic trade. In the instant case, admittedly the Coordination Committee, which may be a person as per the definition contained in Section 2(l) of the Act, is not undertaking any economic activity by itself. Therefore, if we were to look into the agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son, the argument predicated on the right of trade union under Article 19, as professed by the Coordination Committee, is also not available. When the lenses of the reasoning process are duly adjusted with their focus on the picture, the picture gets sharpened and haziness disappears. One can clearly view that prohibition on the exhibition of dubbed serial on the television prevented the competing parties in pursuing their commercial activities. Thus, the CCI rightly observed that the protection in the name of the language goes against the interest of the competition, depriving the consumers of exercising their choice. Acts of Coordination Committee definitely caused harm to consumers by depriving them from watching the dubbed serial on TV channel; albeit for a brief period. It also hindered competition in the market by barring dubbed TV serials from exhibition on TV channels in the State of West Bengal. It amounted to creating barriers to the entry of new content in the said dubbed TV serial. Such act and conduct also limited the supply of serial dubbed in Bangla, which amounts to violation of the provision of Section 3(3)(b) of the Act. Resultantly, the instant appeal of CC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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