Bombay HC asks CCI not to take coercive action against Disney Star

The Bombay High Court has directed the Competition Commission of India (CCI) not to take any coercive action against Star India, Disney Broadcasting India, and Asianet Star Communications on the complaint filed by Kerala-based multi-system operator (MSO) Asianet Digital Network Pvt Ltd. (ADNPL).

The MSO had filed a complaint with CCI against the Disney Star network for alleged abuse of the dominant position. In February, CCI ordered its Director General (DG) to carry out an investigation into the matter and submit an investigation report within a period of 60 days from the date of receipt of the order.

Star, Disney, and Asianet Star challenged the CCI order before the Bombay High Court. The bench of Justices Madhav Jamdar and GS Patel have posted the matter for hearing on 8th June.

The three broadcasters contended that the CCI lacks subject matter jurisdiction as the issue of “circumvention of TRAI’s framework and discriminatory pricing of TV channels, falls within the purview of TRAI”.

While passing the order, the Bombay HC noted that the CCI must be afforded an opportunity of placing its case fully before the court. It added that ADNPL may also place a law or file a further affidavit.

The HC directed CCI to file its Affidavit in Reply and compilation of documents by 7th May 2022. ADNPL can also file its Affidavit in Reply by the same date. A rejoinder by Disney Star can be filed by 3rd June 2022.

"We will hold the matter over to the 8th June 2022 when it will be placed high on the supplementary board for directions so that we can fix a date for final disposal at the admission stage," the bench said in its order.

The HC has directed Star, Disney, and Asianet Star to furnish documentary material and information on a “without-prejudice and no-equities basis” to the CCI DG such as is called for or in response to his queries.

Further, the CCI cannot pass any further orders or adjudicate further on ADNPL’s complaint until further orders of the Court. "The CCI is not to permit or direct any coercive actions against the Petitioners until the next date. This order will operate until 8th June 2022," the order reads.

The bench also ordered that the information collected by the DG is to be kept confidential as specifically required by law. The information gathered by the CCI cannot be shared with ADNPL.

The CCI had directed an investigation against Star India, Asianet Star, and Disney Broadcasting India on the basis of information filed by ADNPL, which has operations in Kerala, Karnataka, Telangana, and Andhra Pradesh.

ADNPL had alleged that Disney Star is circumventing the Telecom Regulatory Authority of India's (TRAI) New Regulatory Framework by granting additional discounts to ADNPL's competitor Kerala Communicators Cables Limited (KCCL). It was alleged that Disney Star entered into marketing agreements with KCCL whereby the latter gets paid for advertising.

Disney Star has rejected this claim by arguing that the subscription agreement and marketing agreement are two independent transactions. It also argued that ADNPL is attempting to link two different transactions with mala fide intentions.