VietNamNet Bridge – Megastar, a company with  90 percent of foreign capital, confirmed at a video conference on November 9 that it didn’t violate Vietnamese law. However, the legal representative of complainants said that Megastar provided wrong information.

Six film companies accuse Megastar of imposition

At the press conference in the form of video conference in Hanoi and HCM City, Megastar Chair Brian Hall (photo) stated that Megastar didn’t agree with any point in the petition sent by four companies to the Agency for Competition Control.

Hall said that the plaintiffs couldn’t prove that Megastar increased the film leasing charges since mid-2009, when Megastar began applying the minimum per cap (MPC) policy on film leasing price

Megastar representative said that on September 17, the plaintiffs made corrections to their  supplementary explanation document sent to the Agency for Competition Control, and withdrew their accusation against Megastar, according to which the company forced them to apply the minimum ticket prices.

However, Nguyen Ngoc Son, legal consultant for the plaintiffs, said that Vietnamese firms have never accused Megastar of imposing minimum ticket prices. They only accused Megastar of imposing the MPC. Therefore, it is not true that the plaintiffs withdrew their accusation against Megastar.

Regarding the accusation that Megastar forced its clients to buy accompanying films, (for example, in order to have Transformers, cinemas have to buy the cartoon Ice Age 3), Megastar Chair Brian Hall said that his company has never had such a policy. However, he admitted that a Megastar employee, who doesn’t hold an important position, offered some cinemas to buy two films – Transformers and Ice Age 3 - at once.

Responding to the accusation that Megastar imposed conditions for cinemas to restrict film distribution, Megastar said that they asked film renters to prove that they can ensure good quality environment for screening the films . Cinemas have the rights to choose their partners, if they are incapable to screen Megastar’s films, they can choose other film distributors, the representative said.

“It is unfair if we have to commit to supply films for them but they don’t have to commit how they will screen our films,” he said.

Vietnamese firms said that Megastar asked them to screen its films during peak hours and at the best projection rooms, even when the films are no longer popular among the viewers.. This policy has indirectly affected cinemas’ initiative and the competitiveness of other film importers and distributors in Vietnam.

Hall said that the MPC policy affects mainly? low and medium income earners in Vietnam. According to Hall, three years ago all foreign films were screened at Vietnamese cinemas  12-16 weeks later than in developed markets like the USA. Presently, the Vietnamese can enjoy blockbusters at the same time as the audiences in North America and Europe. The viewers who are low and medium income earners can watch the films after 4-5 weeks, when the MPC policy is no longer applied. Therefore, all Vietnamese audience benefits from this policy.

Son, the legal representative of Vietnamese cinemas, said that this accenuates the gap between the rich and the poor . He said it is better to let the rich and poor  watch new films at the same time but the rich could then enjoy better services based on their higher pay.

“We have been negotiating this with Megastar for nearly a year ,” Son said.

The timeline of this case:

June 2009: Megastar started implementing the minimum film leasing price per each audience (MPC), fixed at 25,000 dong (after tax).

March 1, 2010: six companies including the Saigon Movies JS Company (running the Cinebox Hoa Binh cinema in HCM City), Movie 212 JS Company (Cinebox Ly Chinh Thang in HCM City), Saigon Movie Media JS Company (Dong Da, Thang Long, Toan Thang, Vinh Quang cinemas in HCM City), Thien Ngan Movie JS Company (Galaxy cinemas), Hanoi Movie Co, Ltd. (Thang Tam cinema in Hanoi), Dong Nai Movie Distribution Centre (Thanh Binh and Song Pho cinemas in Dong Nai province) sent their petition against Megastar to relevant agencies.

March 17: the conciliation process failed. Six companies sent their petition to the Ministry of Industry of Trade’s Competition Control Agency.

May 12: the Competition Control Agency decided to conduct initial investigation over Megastar.

May 21: Megastar sent a dispatch to the six companies asking them to meet with Megastar representatives on May 25, at the place and time fixed by Megastar. The six films said that Megastar’s act showed a patronizing attitude.

June 26: representatives of Megastar, six companies and relevant agencies took place at the Vietnam Movie Administration in Hanoi.

June 18: the Competition Control Agency decided to conduct an official investigation. Two companies – the Hanoi Moive Co., Ltd and Dong Nai Film Districbution Centre were rejected from the case because they were not affected by Megastar’s MPC policy. The investigation had been  planned to last six months. It will finish on December 18.

According to the Competition Control Agency, the case can be brought to the Committee for Competition.

Source: VietNamNet/VNE