2013 (4) TMI 623 - Commission - Law of Competition

TV Ratings Firm Investigated for Unfair Practices: Skewed Data Hurts Rural Channels and Ad Market Fairness.

The Competition Commission of India identified a prima facie case of abuse of dominant position by a television viewership measurement firm under Section ... Unfair trade practice –u/s 19 (1) (a) – consideration of relevant market - informant alleged that the OP was a sole and dominant television viewership measurement firm in India and it has abused its position with respect to measurement of viewership in contravention of the provisions of section 4 - The Informant also alleged that as a result great financial loss occurred to him and it also affects its reputation. The acts of the OP were not only abusive but also adversely affected competition and were in contravention of the provisions of the Competition Act. Held that - The relevant market for the case is required to be determined keeping in view the provisions of section 2 (r), (s) and (t) read with section 19 (5), (6) and (7) of the Act. The relevant market in the instant case would be a service market of 'popularity evaluation of T.V. Programmes'. Popularity of a programme is directly related to the advertisement revenue a broadcaster can generate from the programme. T.V. Programmes popularity rating, on a commercial basis, is being done mainly by the OP and, prima facie, the OP appears to be a dominant player in the above mentioned relevant market. It is a well-known fact that the taste of programmes differ in urban and rural areas. Thus, installation of people meters only in urban areas can not reflect viewers choice PAN India. The OP had limited its surveys and viewers measurement only to the larger cities with a population of one lakh or more. The rural viewership was completely ignored. Therefore, it is apparent that OP was not displaying the true picture regarding TVR/TRP of Doordarshan. whether there was abuse of dominant position by OP. – held that - Section 4 of the Competition Act provides that there shall be an abuse of a dominant position, if an enterprise directly and indirectly discriminates in providing services to the customers or indulges in practice resulting in denial of market access in any manner to a customer. Due to the discrimination between rural and urban viewers and basing TRP only on the basis of urban viewers, the OP was prima facie indulging in practice of denial of advertisement market. Thus, the Commission is of the opinion that there was sufficient material to refer the case to the DG to cause an investigation u/s 26(1). Issues:Alleged abuse of dominant position by a television viewership measurement firm in India under section 4 of the Competition Act, 2002.Detailed Analysis:1. Background and Allegations:The case involves an information filed by a public broadcasting corporation against a television viewership measurement firm, alleging abuse of dominance in contravention of section 4 of the Competition Act, 2002. The firm was accused of underreporting viewership data, causing financial loss and reputational damage to the broadcaster.2. Market Analysis:The relevant market was identified as the service market of 'popularity evaluation of T.V. Programmes', directly impacting advertisement revenue for broadcasters. The accused firm was considered a dominant player in this market, influencing advertisement rates based on viewership ratings.3. Sampling and Geographic Coverage Concerns:The firm's method of measuring viewership using 'People Meters' was criticized for its limited sample size of 8000 meters installed only in urban areas, neglecting rural viewership patterns. This approach was deemed inadequate for reflecting viewers' choices nationwide, especially in a diverse country like India.4. Impact on Advertisement Revenue and Competition:The ratings generated by the accused firm significantly influenced advertisement revenue for broadcasters, with higher viewership leading to increased advertisement rates. Exclusion of rural areas from viewership measurement was seen as detrimental to fair competition and consumer interests.5. Abuse of Dominant Position:The Commission found a prima facie case of abuse of dominant position by the firm. By focusing solely on urban viewership and neglecting rural areas, the firm was accused of distorting the true viewership picture, discriminating against channels catering to rural audiences, and denying fair competition in the advertisement market.6. Direction for Investigation:Based on the findings, the Commission referred the case to the Director General for investigation under section 26(1) of the Act. The DG was tasked with examining potential violations of the Competition Act and determining the responsibility of individuals involved in the firm's conduct.7. Conclusion and Order:The Commission ordered the investigation to proceed, directing the DG to submit a report within 60 days. The decision emphasized that the order did not signify a final opinion on the case's merits, urging an impartial investigation without influence from the Commission's observations.This comprehensive analysis highlights the key aspects of the legal judgment, covering the issues of alleged abuse of dominant position, market impact, sampling concerns, and the direction for further investigation under the Competition Act, 2002.