India's competition watchdog has found prima facie evidence that Media Pro Enterprises, the joint venture for television content distribution formed by Zee Group and Star TV India, could hinder competition in the industry, according to the Financial Express.
The Competition Commission of India (CCI) says the deal, between the country's two leading broadcasters, could command a share of up to 70% of the TV distribution market, thought to be worth about INR 20,000 crore a year.
Cable TV operators are reportedly concerned that Media Pro will be able to dictate prices for its popular Star TV and Zee programming above that which smaller networks can afford.
The Star channels are distributed by Star DEN, an equal joint venture between News Corporation's Star India and Digital Entertainment Networks (DEN), the multi system operator (MSO). Zee, meanwhile, has a deal with Turner Broadcast International in which it has a 74% shareholding.
The 50:50 MediaPro joint venture now under scrutiny was formed in May between Zee Turner and Star DEN to distribute a bouquet of 68 TV channels.
Rather than pricing cable operators out of the business, Zee and Star India say the new company will create distribution efficiencies and also act as an incentive to cable digitisation; ultimately addressing signal piracy issues.
The Financial Express reports India's anti-trust regulator has ordered the investigation under Section 3 of the Competition Act, 2002. CCI, it claims, has already issued notices to all parties involved in Media Pro Enterprises under Section 36(2) and Section 41(2) of the Competition Act, 2002.
If the deal is found to contravene the Competition Act, the CCI will be entitled to cancel the deal or to request its modification.