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CCI gives clean chit to multiplexes over VPF, Ronnie Screwvala is 'disappointed' 

The producer had filed a plea in the Competitive Comission of India (CCI) against the undue manner in which multiplexes applied the Virtual Print Fee (BPF) for producers and distributors. 

Our Correspondent

The Competition Commission of India (CCI) has ruled in favour of the multiplex chains, PVR, INOX, Carnival Cinemas, and Cinepolis, in the plea against them filed by Ronnie Screwvala. Screwvala had filed the plea in March, citing 'anti-competitive collusion with respect to the undue imposition of the Virtual Print Fee (VPF)'. 

The producer-director had filed the plea against the FCCI Multiplex Association of India following the release of his film, Sonchiriya (2019). Screwvala alleged that the multiplexes were indulging in cartelization and collusion through the use of VPF. The filmmaker also alleged that the chains made producers/distributors pay Rs20,000 for every film screened in their theatres as VPF. 

In return, the multiplexes chains denied the charges and stated that they charge VPF for filmmakers and film distributors in order to replace physical projectors with digital projectors. The chains also reached out to SEBI (Stocks Exchanges Boards of India) to ask Screwvala to desist from commenting on the issue through his social media accounts.

In its observation, CCI observed that Screwvala's complaint did not allege that VPF by itself was anti-competition, but rather opposed the imposition of the fees beyond a period. The CCI also noted that since there was no written agreement between the producers/distributors and the multiplexes over the issue, there could be no 'sunset clause'. 'Sunset clause' refers to a measure that dictates that a statute or rule shall cease to be in effect after a period of time. 

Screwvala's plea had been filed under Section 3 of the Competition Act, 2002, which prevented a company or group to enter into an agreement that deters free-enterprise or competition in business. 

In their judgment, CCI noted, "The commission does not find alleged contravention of the provision of Section 3 of the act against opposite parties being made out." 

The daily tabloid Mumbai Mirror quoted Kamal Gianchandani, the CEO of PVR, stating, "It is a validation of the position we had taken all along." He added, "We are committed to working in a constructive fashion. I'm glad that the debate at the CCI forum is out of the way, this wasn't an industry issue, but rather a disagreement with one producer." 

The report also had Screwvala expressing disappointment at the lack of support for his cause from within the industry. He said, "They (CCI) have ruled on it, and I respect and abide by their final view. Am disappointed though not surprised at the lack of support from colleagues, producers, distributors and the creative community, who in private commended the action, but not one individual, company or association supported my complaint as that would have gone a long way to endorse with the CCI the apparent practices that is common knowledge to all."