<p>On Thursday, the National Company Law Appellate Tribunal (NCLAT) denied a request for the fair trade watchdog CCI to look into the merger of the two largest multiplex operators, PVR and INOX.</p>
<p>Consumer Unity & Trust Society’s (CUTS) case was denied by NCLAT, which noted that the fair trade authority had correctly noted that even if the merger went through, their monopoly in the cinema exhibition sector was not inherently anti-competitive.</p>
<p><img decoding=”async” class=”alignnone wp-image-123791″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/08/theindiaprint.com-nclat-rejected-cuts-request-for-a-cci-investigation-into-the-pvr-inox-merger-download-2023-08-11t165826.790.jpg” alt=”theindiaprint.com nclat rejected cuts request for a cci investigation into the pvr inox merger download 2023 08 11t165826.790″ width=”1491″ height=”950″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/08/theindiaprint.com-nclat-rejected-cuts-request-for-a-cci-investigation-into-the-pvr-inox-merger-download-2023-08-11t165826.790.jpg 281w, https://www.theindiaprint.com/wp-content/uploads/2023/08/theindiaprint.com-nclat-rejected-cuts-request-for-a-cci-investigation-into-the-pvr-inox-merger-download-2023-08-11t165826.790-150×96.jpg 150w” sizes=”(max-width: 1491px) 100vw, 1491px” title=”NCLAT rejected CUTS' request for a CCI investigation into the PVR INOX merger 3″></p>
<p>On September 13, 2022, the Competition Commission of India denied CUTS’ request for a probe into the merger, and CUTS appealed the decision.</p>
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<p>However, on February 16, 2023, the Mumbai bench of the National Company Law Tribunal (NCLT) authorized the merger and sanctioned the plan of merger by absorbing Inox with PVR while the appeal was pending.</p>
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<p>According to CUTS’s appeal, the transaction is free from Section 5 of the Competition Act’s notice requirement because it meets the criteria for the de minimus exemption.</p>
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<p>It also claimed that the Covid-19 epidemic was to blame for Inox’s FY21 revenue of less than Rs 1,000 crore, which would have required mandatory notification to the Commission for approval.</p>
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<p>According to CUTS, the merger will result in a sizable market share in the majority of relevant areas, which will cause the film exhibition business to consolidate.</p>
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<p>It will result in a decrease in consumer choice, a negative impact on consumers in the form of high prices and a decline in the quality of food and services, the inability of other movie theaters to access distributor-supplied movies and advertising content, and the combined entity’s strong bargaining power, which is likely to result in onerous terms for distributors, particularly for relatively low-budget movies and vendors.</p>
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<p>However, NCLAT pointed out that Section 4 of the Act deals with the misuse of a dominant position, for which the Commission correctly noted that even if the merger goes through, dominance in and of itself is not anti-competitive.</p>
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NCLAT rejected CUTS’ request for a CCI investigation into the PVR INOX merger
