CCI Orders Probe into PVR INOX's Alleged Antitrust Violations over VPF Charges

In a significant development, the Competition Commission of India (CCI) has directed an investigation into PVR INOX Limited, India's largest multiplex operator, over allegations of abusing its dominant position in the market. This comes nearly two weeks after the VFX issue temporarily halted the advance booking of the much-awaited film Jolly LLB 3 in PVR and Inox theaters.

The case was initiated by the Film and Television Producers' Guild of India, which represents nearly 170 producers. The Guild alleged that the Virtual Print Fee (VPF), introduced in the mid-2000s to help theaters transition from analog to digital cinema projectors, was supposed to be a temporary measure. However, the practice continues in India more than a decade after the full digitization of theaters in 2014, placing a disproportionate burden on small and medium producers.

The CCI observed that PVR holds a dominant position in the "exhibition of films in multiplex theaters" market and prima facie evidence shows discriminatory treatment. It was revealed that nearly 70% of Hollywood releases were not charged VPF, while Indian producers were consistently billed. Calling this conduct potentially violative of the Competition Act, the CCI has ordered its Director General to launch a detailed probe into PVR's practices and submit a report within 90 days.

Meanwhile, charges against UFO Moviez India and Qube Cinema Technologies have been dropped, as similar issues had already been dealt with in an earlier case. The spotlight, however, remains firmly on PVR INOX, India's largest multiplex operator with over 1,700 screens and around 30% of the national box office share.