ACCC authorises Independent Cinemas to bargain collectively

16 March 2018

The ACCC has authorised Independent Cinemas Australia (ICA), and its current and future independent cinema members, to share information and collectively bargain with film distributors on the terms and conditions of film licensing agreements.

“Authorisation is likely to benefit the public as it should reduce negotiation costs for independent cinemas and distributors who participate,” ACCC Commissioner Roger Featherston said.

“Any cost reductions and improved terms from collective bargaining may help the viability of small cinemas, and allow them to reinvest into their cinemas, creating a better experience for cinema-goers.”

“Collective bargaining will also assist smaller cinemas in negotiating film season length and session times that are more appropriate for local demand. This may result in a greater variety of films being shown, providing greater film diversity and choice for local consumers,” Mr Featherston said.

The ACCC took submissions from a wide range of cinemas, film distributors and other interested parties, conducting two rounds of consultation, publishing a draft determination, and holding a pre-decision conference. While there were a number of submissions in support, film distributors raised concerns about cinemas sharing information and the possibility that they would insist on the same outcome for all cinemas.

After considering all the evidence and submissions, the ACCC considers that authorisation is likely to result in limited public detriment.

Participation in the collective bargaining is voluntary for all parties, and the authorisation does not allow cinemas to engage in any collective boycott of films supplied by distributors.

“The information sharing component is not likely to harm competition. Independent cinemas face competition from large chains, and this authorisation will not override any confidentiality arrangements protecting distributors’ commercially sensitive information,” Mr Featherston said.

Authorisation is granted for five years, rather than the 10-year period sought.

“With the film industry subject to changing technology and consumer preferences, there is some uncertainty about the impact of authorisation on the industry. If ICA seek reauthorisation in 2023, the ACCC will test the evidence and assess whether the expected benefits outweigh any detriments,” Mr Featherston said.

Further information is available at: Independent Cinemas Australia Inc - Authorisation

Background

ICA is a not for profit industry association representing independent cinema owners in Australia and New Zealand. ICA has 84 members across Australia.

ICA members range from those operating several cinema complexes in metropolitan areas to members with single complex urban and regional cinemas.

Film distributors include Paramount Pictures, Sony Pictures Releasing, Twentieth Century Fox Films, Universal Pictures International Australasia, the Walt Disney Company (Australia) and Warner Bros/Roadshow as well as smaller independent distributors such as Entertainment One Films Australia, Studiocanal and Transmission Films.

Notes to editors

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act (2010). Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

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