Pranav B Prem

The Competition Commission of India (CCI), in an order dated September 30, has directed the Director General (DG) to investigate multiplex giant PVR Inox for allegedly abusing its dominant position by continuing to charge a Virtual Print Fee (VPF) from film producers. The order came on a complaint filed by the Film and Television Producers’ Guild of India Limited (“the Guild”), representing more than 170 producers across the country.

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The Guild alleged that VPF, which was originally introduced in the early 2000s to cover costs of transitioning from film reels to digital projection, had lost its justification after the industry’s complete shift to digital by 2014. Despite this, PVR Inox continues to levy VPF at the rate of up to ₹27,500 per film per screen. The Guild argued that the practice creates a financial barrier for small and independent producers and amounts to an unfair trade practice under the Competition Act. It was further alleged that PVR Inox applies VPF selectively and discriminatorily. According to the Guild, certain large production houses such as Yash Raj Films and Viacom 18 have been given concessions or complete waivers of VPF, whereas small and independent producers have not been extended similar benefits. The Guild also highlighted that major Hollywood studios no longer pay VPF, giving them an undue advantage over Indian producers.

In its defense, PVR Inox argued that VPF was industry practice and not anti-competitive, as producers voluntarily entered into agreements with cinema exhibitors knowing the terms. The company also contended that since producers had already signed contracts, no question of abuse of dominance arose.

The CCI, however, found merit in the Guild’s submissions. The bench, comprising Chairperson Ravneet Kaur and Members Anil Agrawal, Sweta Kakkad, and Deepak Anurag, observed that PVR Inox holds a dominant position in the multiplex exhibition market, given its extensive nationwide presence, largest screen share, and significant share of box office revenues. It noted that continuing to levy VPF even after the digital transition had been completed, and doing so selectively, could amount to an abuse of dominant position under Section 4(2)(d) of the Competition Act, 2002.

The Commission emphasized that the very nature of VPF—as a transitional mechanism—meant that its continued imposition could not be justified once digital projection systems became standard across the industry. The Commission observed:  “Putting such conditions on producers by OP-3 (PVR Inox) for exhibiting their films substantiate the allegation of not only imposing a supplementary obligation of charging VPF without any specific service to producers but also of imposing an unfair condition for exhibiting films.”

The Commission also examined whether PVR Inox’s practice could be seen as discriminatory. It noted the allegations of favorable treatment given to some large producers and Hollywood studios while smaller Indian producers were compelled to pay the full VPF. Such conduct, it stated, prima facie demonstrated discriminatory pricing and terms of access in violation of competition law.

On these considerations, the CCI held that a prima facie case of contravention of Section 4 of the Competition Act was made out against PVR Inox and ordered the DG to conduct a detailed investigation into the matter within 90 days.

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Meanwhile, two other opposite parties—UFO Moviez and Qube Cinema—were not directed for investigation, as similar concerns raised against them had already been adjudicated in an earlier case (In Re: The Film and Television Producers’ Guild of India Limited v. UFO Moviez India Ltd. & Ors.). Accordingly, the CCI concluded that the allegations against PVR Inox warranted a full probe to determine whether the continued collection of VPF amounts to abuse of dominance, potentially restricting the ability of small and independent producers to release films in multiplexes and thereby impacting competition in the film exhibition sector.

Cause Title: The Film and Television Producers’ Guild of India Limited V. UFO Moviez India Limited & 2 Ors.

Case No: Case No. 42 of 2023 

Coram: Ms. Ravneet Kaur (Chairperson), Mr. Anil Agrawal (Member), Ms. Sweta Kakkad (Member), Mr. Deepak Anurag (Member)