CCI directs probe against Star India, Disney Broadcasting India & Asianet Star Communications over allegations of discriminatory pricing and abuse of dominant position

Read Order: Asianet Digital Network (P) Ltd. vs. Star India Private Limited & Ors. 

Pankaj Bajpai

New Delhi, March 8, 2022: While noting that the Opposite Party (Star India including its subsidiaries and group companies) was providing a bouquet of channels to the competitor of the Informant(Asianet Digital Network) at lesser/ discounted prices resulting into denial of market access and also amounting to discriminatory pricing,the Competition Commission of India has held such discriminatory conduct of price discrimination between different Multi System Operators (MSOs) to be in violation of Section 4(2) of the Competition Act, 2002. 

A Coram of Ashok Kumar Gupta (Chairperson), Sangeeta Verma (Member) & Bhagwant Singh Bishnoi (Member) observed that resultant impact of such discrimination was that the Informant was constrained to price its channels at a higher price and ultimately pay the price by losing consumers consistently. 

The observation came pursuant to an information filed by Asianet Digital Network (P) Ltd. (Informant/ ADNPL) u/s 19(1)(a) of the 2002 Act against Star India (P) Ltd. (first Opposite Party – SIPL), Disney Broadcasting (India) Limited (second Opposite Party – Disney) and Asianet Star Communications Private Limited (third Opposite Party – Asianet Star) alleging abuse of dominant position by OPs by discriminating the Informant in not extending the discounts, which are offered to its competitors. 

According to the Informant, such conduct in offering discriminatory discounts is alleged to be in contravention of the provisions of Section 4(2)(a)(ii) of the Act being unfair/ discriminatory prices, as also the provisions of Section 4(2)(c) as it denies market access to the Informant as well due to the inability of the Informant to compete in the downstream market of distribution of TV channels given the unfair advantage first OP has conferred upon the Informant’s competitors. 

After considering the submissions, the Coram found that the main thrust of the allegations levelled by the Informant is that by offering additional discounts to select MSOs and the main competitor of ADNPL in Kerala viz. KCCL, first OP has placed the MSOs like ADNPL at a huge disadvantage which is detrimental to the competition and competitors in the market. 

The relevant product market is “market for provision of broadcasting services” as first OP is engaged in providing the services of broadcasting satellite-based TV channels in India, noted the Coram. 

The CCI found that since the very premise of the Informant is price discrimination between its various distributors in the State of Kerala and also keeping in mind factors such as language and consumer preferences, the relevant geographical market is ‘State of Kerala’. 

On the basis of market share, dependence of consumers, size and resources of the enterprise (being part of global media conglomerate), vertical integration of the enterprise and countervailing power, the Commission opined that first OP enjoyed a position of dominance in the relevant market. 

Accordingly, the Commission directed the Director General (DG) to cause an investigation into the matter and submit an investigation report within a period of 60 days.