NCLAT rejects an appeal to look into the PVR-INOX merger

10 Aug 2023 , 03:37 AM

The appeal filed by the Consumer Unity and Trust Society, a think tank, requesting that the Competition Commission of India look into the PVR-INOX merger, was dismissed by the National Company Law Appellate Tribunal on Thursday.

The merger could have a significant adverse effect on competition (AAEC), which could be harmful to consumers, according to the senior counsel for CUTS, given that the combined entity will control more than half of the screens in the nation.

On the other hand, the senior attorney for the combined corporation, who was added as a party to the lawsuit, had argued that the mere existence of a dominant position could not serve as the foundation for claims of abuse of the position.

According to CUTS, the Competition Commission had previously refused to permit PVR to buy DT Cinemas in some areas since doing so would have created a monopoly in those areas. In requesting the same remedy, it had said that the PVR-INOX merger had hampered competition in 46 markets across the country.

The attorney for CUTS based his argument that an investigation might be conducted in cases involving dominant positions regardless of threshold on European legal precedent. Examples from France and Belgium were used by the attorney.

Due to decreased revenue from Covid, the PVR-INOX merger was below the threshold limit of CCI to investigate such transactions.

The CCI issued orders in September 2022 dismissing the CUTS application, citing that suspicion of anti-competitive behaviour by a company cannot be the focus of an investigation.

On March 27, 2022, PVR and INOX Leisure announced their merger. Over 1,600 of the country’s 3,200 screens are under the combined management of this corporation.

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