ACCORDO DISTRIBUTORI ED ESERCENTI CINEMA
PRESS RELEASE
PRESS RELEASE
Cinema: investigation to ascertain agreement between film distributors and exhibitors
The Competition Authority has begun an investigation of the associations of Italian cinema exhibitors (ANEC) and film distributors (Fidam and Unidim), and the leading cinema film distribution companies: 20th Century Fox Italia, Cecchi Gori Distribuzione, United International Pictures, Medusa Film, Warner Bros Italia, Columbia Tristar Film Italia, Buena Vista Inter. Italia and Filmauro. The investigation also includes all the cinema operators throughout Italy that have concluded contracts with the film distributors, under which they are only able to hire one or more box-office successes if they also hire a number of B-films, and all the cinema operators in Rome enjoying exclusive rights.
The purpose of the investigation is to ascertain whether any of these have acted anti-competitively, violating section 2 (2) of the Competition Act.
In particular, the investigation relates to the widespread use throughout Italy of what is known as block-booking for the hire of films for public exhibition. This practice makes the acquisition of successful films conditional on the simultaneous hire of a series of minor B-films, with the result that distributors are in a position to prevent cinema owners from screening other films that they consider to be more profitable and to shield less important films from competition.
The purpose of the investigation of the Rome exhibitors is to see whether exclusive territorial rights are stipulated in the contracts for hiring films for public exhibition in cinema halls. Such conditions only permit the distributors to hire box-office successes to exhibitors which have exclusive territorial rights, and are not permitted to offer the same product to any other cinema hall. This practice has been reported by independent cinema owners.
The widespread practice of block-booking and exclusive rights might be the result of collusion between the distributors and exhibitors.
Lastly, the investigation will examine the way in which they distributors’ and the exhibitors' associations set the final prices for film hire, laying down standard percentages and payment terms in framework agreements, and agreeing on setting cinema box-office prices.
The investigation is due for completion by 31 July 2000.
Rome, 21 October 1999