After almost eight months of remaining silent, major film distributor and cineplex operator Megastar Media Company on Tuesday called a news conference in HCMC where it publicly denied all monopoly allegations by six local cinema operators.
 |
| Brian Hall (2nd, L), chairman of Megastar Media, and other company executives meet the press in HCMC on Tuesday. |
The company disagrees with the allegations stated in the complaint letter and the supplement letter submitted by the six cinema operators to the Vietnam Competition Authority, Brian Hall, chairman of Megastar Media, told the conference which was also attended by reporters in Hanoi through a live telecast.
“Since we started doing business in Vietnam in 2006, we have not committed any act of violating Vietnamese law,” he said. “Megastar neither imposes or increases prices unreasonably, causing damages to customers, nor imposes any tying obligation forcing the cinemas to get a non-blockbuster film along with the one the cinemas wanted to rent in any contracts as accused.”
In late June Vietnam’s competition regulator announced to look into a class action brought against Megastar Media, a joint venture between Envoy Media Partners Limited of British Virgin Islands and Vietnam’s Phuong Nam Corporation.
The six cinemas – Galaxy Studio, Saigon Films, 212 Movies, Saigon Movies Media, Dong Nai Publishing Movies Center, and Hanoi Movies One Member Limited Company – collectively filed a complaint on March 17.
They claimed Megastar, which also has its own cinema system in Vietnam, had been competing unfairly by taking advantage of its dominance on the domestic market and dictating contract terms for film distribution which they alleged were unacceptable.
Hall said Megastar had requested the competition regulatory body to promptly cease the investigation against Megastar since the allegations by the complainants were groundless.
Megastar is alleged to hold a dominant position in the relevant market but the complainants have failed to identify the correct relevant market and prove Megastar’s dominant market share, he said. The relevant market, he added, should be the service of distribution of all films in Vietnam.
As for the allegation that Megastar has unreasonably increased the film rental price by adding the “minimum-per-cap” policy, the complainants have not been able to prove a specific increase in film rental price actually paid to Megastar since the introduction of the policy, he said.
In the supplement letter, they rectified the allegation that Megastar had imposed prices and allegedly taken away the complainants’ right to set their ticket prices. On the contrary, the complainants affirmed Megastar had not imposed their ticket prices and further stated that “we do not complain and argue to conclude that Megastar imposed minimum ticket prices to viewers,” Hall told the assembled reporters.
Regarding the allegation that Megastar had compelled customers to accept a condition that if the customer wants to rent a film, it has to rent another film distributed by Megastar, Hall confirmed there are no such tying obligations in Megastar’s contracts with cinemas.
“As an agent of the foreign studios, according to contracts with studios, Megastar is prohibited from tying one film with that of another. Thus, there is no incentive or benefit for Megastar to engage in the alleged act as it would result in breach of its contractual obligation with the foreign studios,” he said.
Megastar recently sent an explanatory statement to the Vietnam Competition Authority denying all the allegations as well.
The current complainants, according to the competition regulator, are Galaxy Studio, Saigon Films, 212 Movies and Saigon Movies Media while two other cinema owners, Dong Nai Publishing Movies Center and Hanoi Movies One Member Limited Company, now have relevant rights and obligations in the case.
But Megastar recently requested the regulator to disqualify Galaxy as complainant because there is no evidence proving that Galaxy’s business has any relations with or is negatively affected by accused behaviors against Megastar.
In the complaint letter, there is no complaint of loss in the distribution market made by other film distributors, he said, and this may suggest that film distributors, including Galaxy, are doing well with their business.
“Harsh and healthy competition in the distribution and exhibition markets has benefited the end-customers in many ways. It offers more options to end-viewers, and there are more choices of films available at the cinemas; there is a varying range of different ticket prices from cinema to cinema. Viewers in Vietnam now have the chance to enjoy the latest and hottest films at the same or similar time with the rest of the world,” Hall noted.
The Vietnam Competition Authority will announce the results of the investigation into the case on December 18 and after that, the case will be handed over to the Competition Council for a final say.
