MOOT
PROPOSITION
CCI - HNLU 13TH JUSTICE
HIDAYATULLAH NATIONAL MOOT
COURT COMPETITION
IN COLLABORATION WITH
AZB & PARTNERS
KNOWLEDGE PARTNER
1. he nion of y ar is a state which was a ritish colony for
years before its declaration of independence in 4 resulting in the
formation of the state of y ar. y ar has a large population of about .
billion and has a diversified economy. s an independent state y ar
adopted its own constitution and constituted its own Parliament which
enacted several laws to govern the newly independent state. n the initial
few decades of its statehood y ar had a closed economy which was
opened to the rest of the world in the early s. With the advent
of liberali ation and the entry of multi-national corporations into
its economic landscape this period sparked an era of unprecedented
economic and technological growth in y ar.
2. he y arian parliament passed stronger and more versatile
laws to regulate its evolving economy. or instance while its laws
historically sanctioned monopolies and restrictive trade practices the
y arian Parliament in enacted the Competition ct
Competition ct to foster and encourage market competition. he
Competition ct of y ar was implemented in two phases the
provisions prohibiting anti-competitive agreements and abuse of
dominance were brought into force in and the provisions
regarding regulation of mergers ac uisitions and amalgamations
were brought into force only in .
3. he Competition ct further established the Competition
Commission of y ar CC to inter-alia prevent practices causing
adverse effect on competition promote and sustain competition in
markets protect the interests of consumers and ensure freedom of
trade in y ar.
4. he CC has also been empowered to en uire into any alleged
violation of the provision of the Competition ct suo moto or on the
basis of information received from any person consumer or trade
association or on references received from the government or any
statutory authority or information received from citi ens. asis the
information received it also possesses authority to direct investigation
through its investigative arm the ffice of the irector eneral
against any perceived anti-competitive conduct if it is of the opinion
that there exists a prima facie case warranting a detailed
investigation.
1.
. fter the receipt of the investigation report by the CC
passes final orders including penalties where applicable after
considering the ob ections or suggestions of the parties involved
including by way of oral hearing s . n appeal against the CC order
can be filed with the y arian Competition aw ppellate ribunal
C and orders from the C can further be appealed before
the upreme Court of y ar. CCE-ECLAT-SC
. ince the y arian competition regime is relatively nascent the
CC C and the y arian Courts hold the decisional practice of
competition regulators in the uropean nion and nited tates of
merica . . . in high regard. iven that the laws of y ar
including its competition laws are in pari-materia with the laws of
ndia the y arian competition authorities Courts and ribunals
consider orders and udgments of ndian courts and tribunals to have
high persuasive value. urther the ndian currency i.e. the ndian
ational upee is the official currency of the republic of y ar.
. Playflix ntertainment ncorporation Private imited Playflix is
an online audio-video streaming platform which was
incorporated in . t offers services related to streaming of movies
music sports events web series documentaries and other audio-video
entertainment content. n order to use its services a customer has to
create an account with Playflix using a uni ue user and password
along with payment of subscription charges. user has a choice to pay
subscription charges on a monthly uarterly or annual basis. Payment of
subscription charges can be made through two modes only a
payment through online payment gateway system services provided by
Pay- play Payment imited Company Pay- play and b e-
wallet owned by Playflix. sers do not have option to make payment
through nified Payments nterface P or any other mode.
. t the time of signing up for Playflix the user has to agree with
the ata ccess and ata Protection P policy of Playflix which
among other things restricts users from sharing their credentials with
any unauthori ed person. t also makes the user allow Playflix access to
storage data of the user s device. f the user refuses to grant such
storage access the application crashes.
2.
. ubscription charges at the time of beginning of Playflix s
operations were
able
. Playflix s popularity soared in when it won the rights to
stream the inaugural - Cricket eague C event from oard of
Cricket Control of y ar through an open bidding process. uring this
period Playflix witnessed tremendous growth in its user base. he
number of users increased from . million to million users in ust a
span of 3 months.
. ncrease in the popularity of Playflix attracted the attention of
various film production houses in y ar. yewood Production ouse
yewood the oldest and biggest movie producer in y ar and has
over the years released a number of blockbuster movies. yewood
approached Playflix for the release of their movie he bsconder .
yewood s chairman and managing director r. ems also heads the
y arian ntertainment ssociation which is an association of film and
music producers in y ar.
. Playflix privately negotiated a deal with yewood for release of
he bsconder and purchased the exhibition rights on 4 premium on
cost of production. With regards to intellectual property rights
yewood retained the exclusive rights over all the characters storyline
and the entire cinematic universe. he bsconder was a huge success
and conse uently Playflix s popularity rose even further. ollowing the
trend set by yewood other production houses also started entering
into agreements with Playflix for release of their digital content on
platform. t the end of Playflix had million subscribers
and the company s net worth was crores.
3.
3. ollowing the success of Playflix in platform industry y ar
witnessed entry of six new players in this market. igshow Prime
ntertainment ncorporation igshow Prime and porty edia
ntertainment Private imited porty were the two ma or international
companies that entered the market through their wholly owned
subsidiaries igshow and ports Play respectively.
4. he entry of new players made the market more competitive. n
particular igshow and porty uickly gained popularity in the
space. igshow marketed itself as a premium streaming platform and
offered streaming of 4k resolution video uality digital content. igshow s
subscription charges were higher than the average subscription charged
by other players. n the other hand ports Play pro ected itself as a
platform for the youth and sports enthusiasts by providing exclusive
sports content in 4k resolution free of charge for the initial six months of
subscription.
. ver a period of time igshow and ports Play witnessed a rise in
their demand owing to their business strategies. ccording to a market
report published in the year by igh- ive maga ine the market share
of various players in the market stood as follows
able
. ccording to ilmywood imes - imes a reputed maga ine of
the y arian film industry Playflix was found to be the most popular and
sought-after platform for film producers. he maga ine also
conducted a public survey which indicated that the people of y ar
were more interested in science fiction and superhero action movies
with a continuing story line through se uels or mixing multiple
cinematic universes.
4.
. fter the success of he bsconder yewood commenced
production of a se uel titled he bsconder eturns. owever this time it
negotiated a deal with igshow to provide enhanced experience to
users through 4k resolution streaming.
. n late post the release of he bsconder eturns while
igshow was en oying the success and popularity Playflix market share
and revenue were on a decline. Playflix observed that the user base
had been stagnant since and has in fact seen a drop in user
base after the release of he bsconder eturns. otably they were
still considered the most popular platform in the latest report of
igh- ive aga ine.
. n ontech oldings ncorporation ontech a financial
investment company agreed to invest million in Playflix to
assist it during this financial instability. Pursuant to the fundraise from
ontech Playflix also entered into a collaborative arrangement with
Caltel elecom td Caltel a ma or player in telecommunication
services. ccording to the arrangement Playflix agreed to offer 3
months free subscription to postpaid customers of Caltel. n return
Caltel agreed to provide free sim card and mobile data for 3
months to new users of Playflix. urther in an attempt to regain its
market share Playflix also decided to cut down its subscription
charges by .
. fter implementing such changes Playflix witnessed a growth in
the user base and market share. uring this period Playflix also
conducted market research and concluded that as of uly
although there were million people watching its online content only
about million were its subscribers. he marketing team of Playflix
also concluded that primary reason for this difference was the
practice of rampant d-password sharing by their subscribers. t was
found that on an average every nd subscriber shared his her
password with at least -3 people. t this time all other
platforms were e ually worried about the problem of password
sharing and were struggling to find a solution.
5.
. n an effort to counter this problem Playflix established an in-
house research and development wing Wing which was
entrusted to resolve the issue at the earliest. n ctober the C of
Playflix r. eoberg met s. li a the C and founder of the
ecPass echnology ncorporation ecPass during a business trip to
California. ecPass is a leading market player in the password and
privacy protection service industry having strong presence in various
parts of the globe. t also provides password encryption and
authentication services through its wholly owned subsidiary P
nternational ncorporation P . P has significant presence in y ar
and provides its services to ma or governmental bodies including
epartment of ailways and ncome ax epartment. uring their
conversation r. eoberg noted that ecPass offers a speciali ed
software that restricts password sharing by linking the user id with the
geolocation of the device.
. s of 3 arch P had assets worth crores and an
annual turnover of 3 crores. or the same period Playflix
recorded a turnover of crore while it had assets worth 3
crores.
3. n returning from the tour r. eoberg shut down the Wing
and entered into an agreement to ac uire . stake in ecPass.
his offer was accepted by ecPass and accordingly a notice was
filled pursuant to ule of the CC Procedure in regard to the
transaction of usiness relating to Combinations egulations in
the specified format along with the declaration specified in the
chedule . he transaction was closed immediately upon the receipt of
acknowledgment of the filing of the notice.
4. n completion of the deal ecPass established an office in ndia to
assist Playflix in its operation. n pril post integration of
ecPass tool Playflix updated its software application and user policy
whereby it re uired users to link their device with their user . user
was permitted to link multiple devices for an increased subscription
price. or users with single device subscription changing of the device
linked with another device could be done by making an application to
customer support where such change would be affected within -
business days.
6.
25. Playflix also started making agreements with producers whereby
the producers were asked to sell streaming rights for all their digital
content on Playflix exclusively. Producers who didn t accept exclusivity
were offered a comparatively lower proportion of premium on the cost of
production. yewood was the first production house that entered into
an exclusive arrangement for the release of its documentary Warrior
in White and agreed not to release its content on any other platform.
n an interview with - imes r. ems praised the C of Playflix for
making Playflix a more secure platform by effectively countering the
password sharing issue. e also asserted that for the sake of fair
business and protection of artistic integrity the producers should
encourage those platforms which have been attempting to
address issues of password sharing.
26. n yewood decided to co-produce a multiverse movie
titled he bsconder Caught through a crossover between the
cinematic universes of yewood s highest grossing and most popular
movie he bsconder including he bsconder eturns and he
Criminal Catcher a movie produced by arvel Cinema arvel which is
a prominent ollywood production house. fter this announcement
igshow approached yewood and arvel hoping to reap the
benefits of its earlier collaboration with yewood. owever yewood
expressed its inability to igshow citing business and strategic reasons
while arvel denied the offer stating that they would have to follow the
footsteps of yewood for commercial reasons as they were
collaborating for the release of he bsconder Caught . Playflix s
release of he bsconder Caught turned out to be a great success.
27. round the same time eptune ovies eptune a newly setup
movie production company contacted Playflix to discuss the release of
one of their movies. owever despite three months of negotiation
eptune struggled to come to an understanding over the financial and
commercial conditions offered by Playflix. espite continuous and
regular follow-ups by eptune Playflix took almost six months to restart
negotiations. owever frustrated by the delayed response from
Playflix eptune entered into an agreement with eo edtek as
Playflix failed to respond to their offer in reasonable time.
7.
. eptune informed y ar Producers ssociation P regarding
Playflix s conduct and demanded that P should take immediate
action against them. P observed that Playflix had adopted
discriminatory practice against the low budget movies by offering
comparatively less price than the price offered for high budget movies.
dditionally it was found that Playflix demanded exclusive release of
their next content on its platform at a discount of on cost of
production C P . o such condition was put to big production
houses.
. P on the basis of an internal survey among production houses
concluded that Playflix has also deployed tactics to delay the
negotiation with small producers costing them their preferred and
commercially suited time frame for releasing their movies. he survey
further revealed that few small producers to expedite the negotiation
and make timely release had to agree with the unfair and arbitrary
conditions imposed upon them. hey were forced to sell the exhibition
rights to Playflix at a discounted price which were well-below the
industry standard.
3 . Contemporarily a - imes market report was published which
showed that igshow had lost the top spot as it had failed to meet the
popular demand of its audience and ports Play also lost its market
share as a result of scrapping its free streaming policy.
3. uring this period the practice of password-sharing continued to
wreak havoc on all other platforms. igshow and ports Play
had their wing working day and night to find a solution without
much success. ports Play which had won the rights for streaming of
the upcoming C was worried that if the password sharing problem
was not addressed it would not be able to recoup the loss of revenue
incurred while providing free streaming services and the loss of user
base inflicted from the scrapping of the policy. t this stage a fired
Playflix employee disclosed that Playflix s ac uisition of ecPass had
given Playflix a cutting-edge tool which largely curbs the menace of
password sharing.
8.
3 . When other companies approached ecPass it refused to share
the tool stating that under the terms of deal with Playflix neither
Playflix nor ecPass is permitted to share or provide the integrated
security system i.e. integration of the ecPass tool with Playflix s in-
house password securing service used to prevent password sharing by
implementing one-time-password system to any other person
or enterprise.
33. ggrieved by this igshow and ports Play approached CC and
informed them that the ac uisition of ecPass is illegal and it should be
declared void ab-initio . hey also claimed that the parties to
combination have disregarded the laws rules and regulations set out
by the CC . hey also alleged that the collaboration agreement
entered into between Playflix and Caltel was anti-competitive and
Playflix has abused its dominant position by resorting to
predatory pricing post procuring investment from ontech.
34. n the other hand P calls a meeting of producers of the
association pursuant to which all producers excluding yewood and
arvel agree to move to CC for addressal of their grievances in
particular the small producers who were allegedly arm-twisted by
Playflix to accept unfair and discriminatory terms. Conse uently an
information was filed with the CC . n parallel members of P also
decided to go on a -day protest against Playflix and resolved to not
release any new content on Playflix during this period.
3 . he CC on receipt of the information by various parties passed
an ex-parte decision forming prima facie opinion that the agreement
between Playflix and yewood is anti-competitive as it has or is likely to
cause appreciable adverse effect on competition in y ar. C
thereby directed the to cause an investigation into the matter and
submit its report in due time
3 . he while conducting its investigation defined the relevant
market as the market for platforms for high-end full-length movies
in y ar and found Playflix to be dominant in such market. With respect
to yewood it defined the relevant market as market for production and
distribution of audio-visual content in y ar .
9.
3 . or ecPass delineated the relevant market as the market for
providing user password security services in y ar . or P the
relevant market was considered to be the market for password storing
and authentication service in y ar .
3 . he suo-moto expanded the investigation to cover abuse of
dominance by yewood and found yewood dominant in the relevant
market. n addition to that the report contained certain other findings
hat the agreement between Playflix and yewood was anti-
competitive and that Playflix had abused its dominant position in the
relevant market.
Post the ontech investment Playflix s conduct including offering of
deep discounts was anti-competitive.
n investigation of the deal between Caltel and Playflix it was
concluded that ontech was a minority shareholder in Caltel. t was also
observed that Caltel had a 4 market share in the telecommunication
sector.
t was observed that ac uisition of ecPass made Playflix technically
superior to any other platform which fueled its dominant position.
ill Playflix used to provide premium on C P if C P was less
than crores and premium on C P for releases with C P above
crores. owever post- the premium was and 4
respectively.
3 . fter receiving the investigation report from the the CC
forwarded a copy to each of the parties and notified the parties to
appear for a hearing on th arch 3 where the following issues will
be discussed and decided
. Whether the ac uisition of ecPass by Playflix is legally valid under
rule of the Combination egulation.
. Whether the arrangement between Playflix and yewood is anti-
competitive.
10.
3. Whether the collaborative arrangement entered into between
Playflix and Caltel is anti-competitive.
4. Whether Playflix has abused its dominant position in the market.
Parties are also allowed to include any other relevant issues.
ote
• he text of y arian Competition ct ules and egulation is
verbatim as the ndian Competition ct ules and egulation.
• he decisional practice of urope nited ingdom and . . . has
significant value in y ar.
11.
nnexure
arket eport on Platform Published by - ews in
able 3
arket eport on Production ouses Published by - imes in
able 4
12.
arket eport on Platform Published by y ar nfotics in
able
arket eport on Production ouses Published by - imes in
able
arket eport by y ar ational ssociation for Commerce on Platform
Published in
able
13.
arket eport on Production ouses by ational ilm Control oard of y ar
able
14.
