The Competition Commission of India (CCI) passed an order dated 16.04.2025 under the provisions of Section 27 of the Competition Act, 2002 (Act) imposing monetary and non-monetary sanctions on UFO Moviez India Pvt. (UFO Moviez), Scrabble Digital Ltd. and Qube Cinema Technologies Pvt. Ltd. (Qube), for contravention of provisions of Section 3(4) of the Act, resulting in tie-in arrangement, exclusive supply agreement and refusal to deal.

In this matter, the Commission determined that UFO Moviez and Qube were significant players in the relevant market for the supply of Digital Cinema Initiatives-Compliant Digital Cinema Equipment (DCI-Compliant DCE) on lease/rent to Cinema Theatre Owners (CTOs) in India. The Commission found that UFO Moviez and Qube, through imposition of restrictions on supply of content in lease agreements entered into with CTOs, created barriers for players engaged in the provision of Post-Production Processing (PPP) services as well as blocked a significant portion of CTOs having DCI-Compliant DCEs from being served by any other player. The Commission held UFO Moviez (along with its subsidiary Scrabble Digital Ltd.) and Qube in contravention of provisions of Section 3(4) of the Act.

The Commission, under the provisions of Section 27 of the Act, directed UFO Moviez and Qube to not re-enter lease agreements with the CTOs imposing restrictions on supply of content from other parties. The Commission further held that the existing lease agreements with CTOs shall stand modified such that they do not impose restrictions on supply of content from parties other than UFO Moviez (and its affiliates) and Qube. The Commission, after considering nature and gravity of the contravention along with assessment of mitigating and aggravating factors, also imposed monetary penalty on UFO Moviez (along with its subsidiary Scrabble Digital Ltd.) and Qube, amounting to Rs. 104.03 Lakh and Rs. 165.8 Lakh, respectively.

A copy of public version of the order passed in Case No.11 of 2020 is available on the CCI website at www.cci.gov.in.

Anti-competitive tie in and exclusive supply restrictions prompt prohibition on restrictive lease clauses and penalties imposed. The Commission found that UFO Moviez (with its subsidiary) and Qube, as significant suppliers of DCI compliant digital cinema equipment on lease, used lease clauses to impose tie in, exclusive supply and refusal to deal restrictions, foreclosing Post Production Processing providers and other content suppliers. Under Section 27 the Commission directed that leases must not impose such restrictions and ordered modification of existing agreements, alongside imposition of monetary penalties and compliance measures to restore competitive access.