Competition watchdog CCI has found prima facie evidence that the alliance between leading electronic media conglomerates Star India and Zee Group could lead to abuse of dominant position, as the two jointly commands a market share of over 60%.
The Competition Commission of India (CCI), on the basis of the prima facie evidence, has asked its Director General (Investigations) to further probe the matter to ascertain if the alliance could violate provisions of the Competition Act 2002, sources said.
"We have found evidence that after the JV, the two companies command a share of over 60% in the market. That is a competition concern. We have send notices to the two companies to explain their position," an official source said.
E-mails sent to Star India as well as Zee Group remained unanswered.
In May, Star Den Media Services Pvt Ltd and Zee Turner Ltd had announced a joint venture to combine distribution of their respective channel bouquets in the country.
Currently, Zee channels are distributed by Zee Turner Ltd, a joint venture company of Zee's parent Essel Group and Turner International, which runs channels like Cartoon Network and Pogo in India.
Normally, such big amalgamations require the Commission's approval, but since the deal was announce before June 1 -- the date when Sections 5 and 6 of the Competition Act became effective, it would be investigate for concerns of violations of Sections 3 and 4 of the Act.
While Sections 5 and 6 mandates companies to seek CCI's approval before going ahead with a merger, sections 3 and 4 deals with anti-competitive agreements and abuse of dominant market position, respectively.
The Media Pro Enterprise India Pvt Ltd will be a 50:50 joint venture between Zee Turner and Star Den Media Services and would jointly aggregate and distribute channels licensed to Zee Turner and Star Den.
Zee Turner Ltd is an existing 74:26 joint venture between Zee Entertainment Enterprises Limited (ZEEL) and Turner International India Private Limited (TIIPL).
