In India, it is well established that dominance is not prima facie a concern, but the abuse of such dominance is. The Competition Act (2002) ("the Act") explicitly prohibits the abuse of dominance in a relevant market in the country.1 The Competition Commission of India ("CCI") looks into allegations that are against the provisions of the Act. Such enquiries can be carried out by a complaint/information received by the CCI. In the present case 'Showtyme v. BookMyShow', the informant Mr. Vijay Gopal filed a complaint against Big Tree Entertainment Pvt. Ltd. under S.3 and S.4 of the Act. Herein, S.3 and S.4 deal with anti-competitive agreements and abuse of dominant position respectively.
For an act to be considered 'abuse' in this context, it is necessary to understand the elements surrounding it, for instance, the meaning of a dominant position and the associated relevant market. The Act lays down the various factors that would constitute a dominant position like the size, market share, economic power, and dependence of the customers on a particular organization and also take into account the size of the competitors and the market. The CCI looks at relative advantages that the organization may have and any other factor that they may deem relevant. Further, the relevant market could be the geographic or product market that depends on factors such as trade barriers, national policies, consumer preferences, physical characteristics, prices of goods, etc. Mr. Vijay Gopal, the founder of Showtyme put forth contentions to prove that BookMyShow (i.e. Big Tree Entertainment Pvt. Ltd.) was entering into exclusive agreements with multiplexes in an attempt to prevent other competitors from entering the movie ticketing market. The present article aims to consider the contentions of the parties and analyze the concept of abuse of dominance in competition law.
Showtyme v. BookMyShow Case
The parties in question are online ticketing platforms. While Showtyme came into the market in 2021, it is alleged that BookMyShow already holds a 90% share in the market. The main argument by Showtyme is that BookMyShow has formed a cartel and is acting in contravention of the Act, thus creating barriers for the other competitors in the market. They have substantiated these claims with the reasons below.
- BookMyShow has exclusive agreements and refusal-to-deal agreements with multiplexes and single-screen theatres (Cinepolis, INOX, PVR, Asian Cinemas, Indra Cinemas, Sudharshan Theatre, etc.) that ensure tickets being sold only through the BookMyShow platform for a period of two to five years.
- BookMyShow charges Rs.25 as a convenience fee to book tickets with a certain percentage going to the multiplexes/theatres in the form of commission as compared to the convenience fee of Rs.11 offered by Showtyme. However, the multiplexes/theatres refuse any association with Showtyme despite offering a lower amount due to the exclusive agreements and the fact that they have been given zero-interest monetary deposits.
- One of the theatres namely Sudharshan Theatres allows BookMyShow to sell more than 50% of the tickets online. According to the Telangana State Home Department's notification, at least 50% of the tickets must be sold at the ticket counter at the theatre.2
Based on this, Showtyme argued that BookMyShow has acted against S.4 of the Act and is abusing the dominant position it enjoys in the online ticketing market.
Firstly, BookMyShow stated that it engages in business with a standard form of contract. The terms, conditions, duration, sharing of convenience fees are negotiated and tailored according to the parties' requirements. It also provided information about its competitors in the market (PAYTM, websites like PVR, INOX, tickets4u, justicket, physical booking, among others), the share of tickets booked on the platform, the agreements, etc. Secondly, BookMyShow is free to decide on the convenience fee as accepted by Showtyme. Lastly, the noncompliance with a Government Order does not amount to a contravention of competition law.
Showtyme claimed that being a new entrant in the online ticketing market, it couldn't establish itself due to BookMyShow. However, BookMyShow contended that Showtyme couldn't have been a competitor in the first place. The complaint was filed on 2/11/2021 but the Showtyme website was launched a week later. The website barely has a market presence to allege that it faced barriers as a new entrant. Showtyme has also not furnished any evidence in light of its statement that multiplexes/theatres refused to associate with them. It has neither proved that BookMyShow holds a 90% share in the market. On the contrary, BookMyShow stated that it was a new entrant and that there are strong competitors in the market because of which it entered into exclusive but short-term agreements with multiplexes/theatres.
With the averments of the parties, the CCI was of the view that the present complaint has to be investigated by the Director-General and it must be determined whether the conduct of the online ticketing platform BookMyShow is anti-competitive and against S.4 of the Act. The CCI prima facie found that there exists a case for investigation.
On the face of it, BookMyShow does have an exclusively strong footing in the online ticketing industry. As per the CCI, certain clauses in agreements with theatres that talk about data ownership give a dominating position to the platform. By the virtue of exclusive agreements, it also prima facie shows that BookMyShow is trying to create a rather restricted environment with the barriers to entrants and competitors in the industry. It disincentivizes the competitors with the growing abuse of such dominance.
The aforementioned agreements also have the potential for BookMyShow to garner greater bargaining power and remain the sole successful player in the market. This also gives the consumer very limited options while booking tickets online. On the matter of convenience fees, the CCI cannot regulate the prices. However, it has acknowledged such charges being accepted and enforced make it easier for BookMyShow to decide the fees and overall control the market.
It is pertinent to note that the findings of the CCI is an observation of the facts and circumstances before it, but it cannot be considered to be a final decision. The finality to the issue lies with the Director General's investigation and it would be based on an in-depth look into the matter. Thus, it would be interesting to see whether BookMyShow's position in the market and its acts amount to an 'abuse' of dominance or not.
1. The Competition Act (2002), S.4.
2. G.O. Ms. 47 of 2006, Telangana State Home (Genl. A) Department, 10th March, 2006.
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