Sobhagaya Media Pvt Ltd. And DEN Networks Ltd

Case No. 11 of 2023 Page 1 of 8 COMPETITION COMMISSION OF INDIA Case No. 11 of 2023 In Re: Sobhagaya Media Pvt Ltd. A-9, Sector-68 Noida-201301 (UP) Informant And DEN Networks Ltd 236, Okhla Industrial Estate Phase III New Delhi 110020 Opposite Party CORAM: Ms. Ravneet Kaur Chairperson Ms. Sangeeta Verma Member Order under Section 26(2) of the Competition Act, 2002 1. The present Information has been filed by Sobhagaya Media Pvt. Ltd. (Informant) under Section 19(1)(a) of the Competition Act, 2002 (the Act) against Den Networks Ltd (DEN/OP) alleging contravention of the provisions of Section 3 and 4 of the Act. 2. The Informant is stated to be a company registered under the Companies Act, 1956 and is engaged in the business of television broadcasting of news, transmissions, systemization of written communications relating to news etc. The Informant declares itself to be a cable television service provider duly registered under Section 3 of the Cable Television Networks (Regulation) Act, 1995. The Informant runs its news channel with the brand name ‘APN’. Case No. 11 of 2023 Page 2 of 8 3. The OP has been described as the agent or intermediary of several broadcasters including ETV-UP and is stated to be distributing around 100 channels of different broadcasters. It has been further submitted that it acts as a content aggregator and offers bouquets for distribution by bundling together channels of different broadcasters. 4. It has been alleged that the Informant entered into an agreement dated 15.12.2015 with DEN for a period from 01.08.2015 to 31.07.2016 (MOU) with the state of Uttar Pradesh as the defined territory. It has been further submitted that the term of this agreement was extended for another year based on oral understanding. DEN was stated to be carrying the Informant’s channel on DEN’s Digital Addressable Networks under the agreement. 5. As per the Informant, it made multiple payments to DEN under the belief that the carriage fee charged by DEN is not more than the fee applicable to other Hindi TV channels. However, the Informant gathered information from reliable sources that the amount charged by DEN from other media companies running numerous channels like News Nation Network Private Limited, Information TV Private Limited, Zee Media Corporation Limited, ABP News etc. was much lower compared to what was being charged from the Informant. 6. As per the Informant, the Telecom Regulatory Authority of India (TRAI) issued a consultation paper on Draft Telecommunication (Broadcasting and Cable Services) Interconnection (Addressable Systems) Regulations, 2016 on 14.10.2016. Post- issuance of the said consultation paper, the Informant is stated to have requested DEN to charge carriage fee in accordance with the consultation paper which was allegedly refused by DEN on the ground that the consultation paper is merely a draft and therefore not binding. Thereafter, TRAI issued a notification dated 03.03.2017 upon which the Informant again raised the issue of exorbitant carriage fee and DEN allegedly conveyed to the Informant that the notification is under challenge before the Hon’ble High Court of Madras. On 23.05.2018, the Hon’ble High Court of Madras upheld the notification dated 03.03.2017 issued by TRAI pursuant to which the Informant demanded refund of the excess amount and advance paid to DEN. DEN, however, allegedly conveyed to the Case No. 11 of 2023 Page 3 of 8 Informant that the judgement dated 23.05.2018 of the Hon’ble High Court of Madras is in appeal before the Hon’ble Supreme Court and assured to carry the Informant’s channel free of cost as it is a free to air channel in case the Hon’ble Supreme Court upholds the judgement of the Madras High Court. 7. The Informant further averred that as per the above mentioned notification dated 03.03.2017, DEN could not have charged the amount from the Informant as it had more than 20% subscribers in the State of Uttar Pradesh. DEN could have charged a maximum of 20 paise per subscriber, however, it has charged much more than that. 8. It has been further averred that DEN had orally assured the Informant that the excess amount will be adjusted in the third year by giving free signal for one year to the Informant. On the basis of this oral assurance, the Informant made payments in accordance with the agreement dated 15.12.2015 for the period from 01.08.2016 to 31.07.2017 under the hope that DEN will adjust the excess paid amount by giving free signal in the third year. As per the Informant, the parties had mutually agreed to extend the agreement on oral terms without executing a further written agreement. 9. The Informant stated that it made various representations to DEN regarding refund of excess money, non-execution of agreement, poor signals to APN (a free to air channel), and also sent reminders related to revision of carriage fees on the basis of the TRAI notification etc. However, DEN did not pay any heed to any of the reminders. 10. The informant has alleged that, in light of the above-mentioned facts and circumstances, DEN has violated various provisions of Section 4 of the Act. 11. Further, as per the Informant, the conduct of DEN also results in constructive refusal to deal as discounts are offered to other channels on certain parameters and APN News is treated differently and excluded, thereby resulting in violation of Section 3(4)(d) of the Act. The Informant has also sought interim relief under Section 33 of the Act by way of directing DEN to carry and air the channel of the Informant pending investigation free of cost. Case No. 11 of 2023 Page 4 of 8 12. The Commission considered the Information in its ordinary meeting on 16.05.2023 and vide order of even date directed to forward a copy of Information to the OP with a direction to file its reply thereon. The reply from the OP was received on 19.06.2023. The Informant was also directed to submit copy of the agreement dated 15.12.2015 executed with the OP as mentioned in the Information. The Informant submitted the said copy of agreement on 05.06.2023. The Informant was also allowed to file its rejoinder to the reply filed by the OP within 2 weeks of its receipt, with an advance copy to OP. The Informant, however, has chosen not to file any rejoinder to the OP’s reply. 13. In its reply, DEN has submitted that the Informant is indulging in forum shopping as Broadcasting Petition No. 79 of 2019 filed by OP against the Informant is pending before the Telecom Disputes Settlement Appellate Tribunal (TDSAT) in respect of default in payment of outstanding amounts towards channel placement fees arising out of the same agreement. It has been submitted that the Informant has put up a similar case, as in the Information, in its counter affidavit to the Petition. DEN has submitted that it raised invoices according to the four channel placement agreements executed with the Informant, however, the Informant consistently made short payments which have led to an outstanding amount towards DEN. Thereafter, DEN served a demand notice dated 13.08.2018 on the Informant and subsequently was constrained to file Broadcasting Petition No. 79 of 2019 before TDSAT. 14. OP has further averred that the channel placement fee depends on various factors such as popularity of the channel, position of the channel, position of neighbouring channels, reach of channel, obligations under broadcaster’s (Reference Interconnect Offer) RIO for pay channels etc. DEN has submitted that the Informant had never raised any complaint against DEN as regards the quality of service or placement fee during the term of the agreement and it is only after the filing of the Broadcasting Petition that the Informant has raised such issues.