CCI directs DG to investigate conduct of BookMyShow

CCI directs DG to investigate conduct of BookMyShow

Competition Commission of India directs DG to investigate the conduct of BookMyShow

The Competition watchdog in a significant order held that there is a negative impact of the exclusive and restrictive agreement between online booking platforms and single-screen multiplexes.

It was held that there is a prima facie case that the conduct of BookMyShow is required to be investigated by the Director-General to determine whether the conduct is in contravention with Section 4 (abuse of dominant position) of the Competition Act, 2022.

The Informant in the present case is a social activist and founder of the online ticketing platform, Showtyme, which is an alternative option for viewers in Hyderabad to book their movie tickets online by paying a convenience fee of Rs. 11/-, which is stated to be 40-50% less than the existing players like BookMyShow.

On the other hand, BookMyShow holds a least 90% market share in the movie booking industry in India. It is alleged that BookMyShow collects Rs. 25/- per ticket as a convenience fee from consumers who book the ticket from their website and share 50% of the convenience fee as a commission with the multiples.

Showtyme offers up to Rs.5/- to the multiplex and theatres out of Rs. 11/- to be charged by it and the rest is kept for running the operations. Despite this, multiples and theatres are unable to associate with Showtyme due to cash loans/monetary deposits given by BookMyShow to them.

It is also alleged that BookMyShow has signed exclusive and refusal to deal agreements with the multiplexes owing to which BookMyShow charged exorbitant and unreasonable convenience charges and the multiplexes sell their movie tickets through BookMyShow only.

Upon a perusal of the facts and contentions of the case, the Commission was of the opinion that "the exclusive and restrictive agreements with single-screen cinemas and multiplexes, in conjunction, prima facie appear to have the potential of denying market access to competing platforms and potential entrants. The cinema theatres, as well as the cine-goers alike, are restricted in their choice of alternate ticketing platforms, during the working of the contracts that BookMyShow has with a large number of theatres/ multiplex chains."

It was further held that "Considering the foregoing, the Commission is of the view that there exists a prima facie case with respect to the conduct of BookMyShow, which requires an investigation by the Director-General ('DG'), to determine whether the conduct of BookMyShow has resulted in contravention of the provisions of Section 4 of the Act, as detailed in this order"

The Commission ordered the DG to submit an investigation report within 60 days from the receipt of this order.