Kerala HC provides breather to broadcasters against CCI probe

Kerala High Court on Thursday pronounced its interim order on broadcasters’ plea seeking stay against CCI probe that was ordered for alleged abuse of dominant position by broadcasters in offering discounts to select Multi System Operators (MSOs).

In the interim order, Kerala HC directed that on a without-prejudice and no-equities basis, broadcasters would have to furnish information and documents to the Director General (investigation arm of CCI), as required by the DG who shall keep the same as confidential as per law.

No coercive action
The High Court (HC) also restrained CCI from passing any further order. Also, the HC ordered CCI not to permit or direct any coercive action against the broadcasters. The matter has now been listed for final hearing on November 11, 2022.

It may be recalled that Kerala High Court had on September 27–after hearing marathon arguments spanning over three days—reserved its order on broadcasters’ plea challenging a CCI probe on jurisdictional grounds.

Star India Pvt Ltd (SIPL) along with its group and subsidiary companies (Disney/ Asianet Star), had on September 19, approached the Kerala High Court challenging a probe initiated by CCI for alleged abuse of dominant position by offering discounts to a select MSO.

Additional discounts
The CCI probe was earlier ordered on the basis of information filed by Asianet Digital Network (P) Ltd (ADNPL) – an MSO engaged in the business of providing digital TV services – predominantly in Kerala.

The main thrust of the allegations was that by offering additional discounts to select MSOs and the main competitor of ADNPL in Kerala viz. Kerala Communicators Cable Ltd (KCCL), Star India Pvt Ltd (SIPL) has placed MSOs, such as ADNPL at a huge disadvantage, which was detrimental to competitors, resulting in distortion of the level playing field in the market place, besides hindering the ability of players to compete in an effective manner.

CCI prima facie found Star India a dominant player in the broadcasting services market in Kerala, owing to its exclusive content, significant market share, size and economic resources and countervailing power, thus making access to its TV channels indispensable for MSO.

Discriminatory conduct
The competition watchdog had also observed that the alleged discriminatory conduct of price discrimination among different MSOs of SIPL has resulted in significant loss in ADNPL’s consumer base.

Accordingly, CCI earlier this year (February, 2022) ordered its arm (Office of the Director General/ DG) to investigate the matter and submit its report.

Separate writs
Aggrieved by the CCI order, SIPL, Asianet and Disney preferred separate writs before the Bombay High Court challenging the order on the ground that CCI lacked subject matter jurisdiction as the issue of pricing of channels by broadcasters fell within the framework of the broadcasting regulator — TRAI.

The Bombay High Court, however, declined to entertain the writ petitions challenging the CCI order directing investigation, due to lack of territorial jurisdiction.

As a result, the broadcasters (Star, Disney and Asianet Star) approached the Kerala High Court on September 19. The Hindu Business Line