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Competition Commission of India orders investigation into BookMyShow

The Competition Commission of India (CCI) has ordered an investigation into online ticketing platform BookMyShow.

A complaint was made by Vijay Gopal, who runs rival movie ticketing platform Showtyme. Gopal has alleged that BookMyShow is colluding with theatres by having exclusive agreements to not sell movie tickets online through anyone else.

The CCI ordered the investigation in June, and the director-general will determine whether the conduct of BookMyShow has violated Section 4 of the Competition Act.

Showtyme alleged that BookMyShow holds at least 90% market share in the movie ticket booking industry in India, and that it is abusing its dominant position. Allegations said that BookMyShow had signed exclusive and refusal-to-deal agreements with theatres; BookMyShow had offered zero-interest loans to theatres; that consumers are paying higher prices for tickets because of convenience fees and that one theatre, Sudarshan Theatre, had allowed placement of more than 50% of tickets for sale through BookMyShow.

In response to the allegations from Showtyme, BookMyShow told the CCI that its share of the market had not exceeded 20%. The company also said that many theatres were still available for competitors to collaborate with, and that because it was a relatively new platform, it had to partner with certain cinemas in order to infiltrate the market.

BookMyShow stated that it provided no monetary incentives to any theatres and that there were many cinemas that run their own online and physical ticketing portals, meaning plenty of competition. The company also said it had no formal or informal agreement with theatres over ticket allocations and that Showtyme approached the CCI with ‘unclean hands’.

BookMyShow also said that the allegations had been submitted to harm its reputation, its convenience fees were transparent and that any violation of a government order on ticket quotas is not the concern of the CCI.

Further information from BookMyShow on the share of the value of tickets booked through the platform against the value of tickets sold; a number of agreements with single-screen cinemas in the Indian state of Telangana and a copy of the agreements with chains such as PVR, INOX and Cinepolis was redacted.

The CCI responded by looking into the alleged anticompetitive conduct and identified the relevant market. BookMyShow said that its market was the sale of movie tickets in India. BookMyShow is available across India so the CCI said that the entire country could be noted as part of its geographical market, and therefore decided that its relevant market was the ‘market for online intermediation services for booking of movie tickets in India’.

On first impression, the CCI said BookMyShow appeared to be the dominant player. Using data from a Kalagato report, the CCI was able to determine that BookMyShow’s share in online movie ticketing, in terms of booking volume, was 78%.

BookMyShow said that it had exclusive agreements with some theatres and the CCI responded with: “Such exclusive agreements have the potential to foreclose or reduce competition in the relevant market, as they may make rival intermediary platforms or new entrants incur significant additional costs to induce the cinemas to give up their exclusive contracts with the leading platform with market power.

“In addition, the agreements with major multiplexes also appear to be of restrictive nature, which does not only curtail the freedom of these multiplexes but may also directly or indirectly incentivise exclusivity and/or restrict choice.”

The CCI also said that BookMyShow’s security deposits dissuaded theatres from moving to other platforms.

“The exclusive and restrictive agreements with single-screen cinemas and multiplexes, in conjunction, prima facie appear to have the potential of denying market access to competing platforms and potential entrants,” it said.

The CCI further noted that BookMyShow’s data collection practices warranted an investigation, but that it could not look into the allegation surrounding the company’s practice of charging a high convenience fee as the CCI cannot act as a price regulator.

Showtyme has asked the CCI to declare the agreements between BookMyShow and Asian Cinemas, Indra Cinemas, Cinepolis, INOX, PVR, and Sudarshan Theatre as illegal and anti-competitive; impose a penalty under Section 27 of the Competition Act; prevent BookMyShow from being able to sell more than 25% of its tickets of any theatres in the State of Telangana and Andhra Pradesh, and not more than 50% for the rest of India; to reimburse litigation cost of Rs. 5,000 (£52/$63/€62) and Rs. 1 for the mental trauma caused; and to direct BookMyShow and all theatres in India to discontinue practices of not dealing with other platforms.

A BookMyShow spokesperson told “BookMyShow conducts its business with the highest standards of compliance with all laws including the Competition law. The CCI’s order, as noted in the order itself, does not amount to a final expression of opinion on the merits and the matter is currently sub-judice.”

Image: Denise Jans on Unsplash