Investigation Against Bookmyshow For Alleged Unfair Competition Practices: CCI seeks report from DG Investigation Within 60 days
The Competition Commission of India (CCI) has ordered an investigation against Bookmyshow for alleged unfair competition practices and sought a report from the Director General (DG) of the investigation within 60 days. The three-member bench headed by Ashok Kumar Gupta (Chairperson), Sangeeta Verma (Member) and Bhagwant Singh Bishnoi (Member) has noted that there exists a prima facie...
The Competition Commission of India (CCI) has ordered an investigation against Bookmyshow for alleged unfair competition practices and sought a report from the Director General (DG) of the investigation within 60 days.
The three-member bench headed by Ashok Kumar Gupta (Chairperson), Sangeeta Verma (Member) and Bhagwant Singh Bishnoi (Member) has noted that there exists a prima facie case with respect to the conduct of BookMyShow, which requires an investigation by the Director General to determine whether the conduct of BookMyShow has resulted in a contravention of the provisions of Section 4 of the Competition Act, 2002.
The informant has alleged that BookMyShow collects Rs. 25 per ticket as a convenience fee from consumers who want to avail the facility of online booking of tickets for movies and shares 50% of the convenience fee as commission with the multiplexes. However, it gives a commission of up to Rs. 6–8 per ticket in the case of standalone or single screen theatres.
On the other hand, Showtyme, belonging to the Informant, offered up to Rs. 5 to the multiplexes and theatres out of Rs. 11 to be charged by it and would keep the rest for running its operations. Despite this, it is alleged that the multiplexes and theatres are unable to associate with Showtyme due to 'cash loans' or monetary deposits given by BookMyShow to them on "zero interest". Thus, the informant has alleged that the OPs are acting in collusion.
The Informant has also alleged that BookMyShow has signed "exclusive and refusal to deal" agreements with Asian Multiplexes Pvt. Ltd., Indra Cineplex LLP, Cinepolis India Pvt. Ltd., INOX Multiplex, PVR Multiplex, and Sudarshan Theatre. Owing to the agreements, besides allegedly charging unreasonable and exorbitant charges under the guise of convenience fees, the multiplexes sell their movie tickets through BookMyShow only.
They have also allegedly signed "refusal to deal" agreements ranging between 2-5 years with the theatres to ensure they are not selling their movie tickets on any other online platform and control the complete market. The convenience fee is paid to theatres and multiplexes on a monthly basis through monthly generated invoices. This shows malicious intent on the part of BookMyShow in creating a cartel with theatres/multiplexes and killing competition by maliciously entering into exclusive contracts with them. This is also leading to an overall increase in the price of movie tickets, inclusive of convenience fees of up to Rs. 19–25 per ticket, which is detrimental to consumers.
The informant stated that Showtyme approached more than 30 cinemas and theatre managements in person and all multiplexes via email in Hyderabad. Some of them confirmed that they could not sell their tickets to Showtyme since they had taken monetary deposits and signed exclusive agreements with BookMyShow. According to the informant, this has created barriers for new entrants like Showtyme and higher prices for end-consumers.
As per BookMyShow, no monetary incentives are provided to any theatres or multiplexes with which it has an association. BookMyShow does not charge any fee for the listing of movie tickets on its platform.
BookMyShow contended that the informant had approached the Commission with unclean hands. The Showtyme website of the informant was launched on 09.11.2021 while the information was filed earlier on 02.11.2021. Thus, the site was launched only after filing the information. The Informant filed the information even before the launch of its website. 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, including BookMyShow.
BookMyShow stated that allegations of creating an entry barrier are misleading as the market is still evolving and volatile in nature. Various participants entered the market, such as PayTM, and they have established a significant presence in the relevant market.
The CCI observed that, prima facie, the informant appears to substantiate the dominant position enjoyed by BookMyShow in the relevant market of "online intermediation services for booking of movie tickets in India."
Case Title: Vijay Gopal Versus Big Tree Entertainment Pvt. Ltd. (BookMyShow)
Citation: Case No. 46 of 2021
Dated: 16.06.2022