Thu, 03 Apr 2003

Cineplex 21 rapped for practicing monopoly

Zakki Hakim, The Jakarta Post, Jakarta

The Business Competition Supervisory Commission (KPPU) has ordered the owner of Cineplex 21 network to reduce its share in the movie theater business in Surabaya, East Java, because it has violated Law No. 5/1999 on unhealthy business competition.

KPPU said on Tuesday that PT Nusantara Sejahtera Raya (NSR), the owner of the movie theaters, was involved in unhealthy business competition through its majority ownership in PT Intra Mandiri and PT Wedu Mitra, which jointly own more than 50 percent of movie theaters in Surabaya.

"NSR ownership, therefore, violates Article 27 of Law No. 5/1999 and it must dilute its shares in both companies to comply with the law," said Faisal Basri, a KPPU executive in charge of the Cineplex 21 case, at a media conference.

The commission gave NSR 48 days to comply with the ruling or risk a Rp 1 billion (about US$112,000) penalty.

Jimmy Herjanto, vice president for operations of Cineplex 21 who attended the news conference, refused to comment.

Meanwhile, Zainal Abidin, a senior official at the Indonesian Cinema Organization (GPBSI), said after the announcement that he felt relieved that KPPU had issued a fair ruling and hoped that the movie theater business could run in a more conducive climate in future.

"We will take precautions so that there will be no further allegations of monopolistic practices," Zainal said.

However, Wahyuni Refi of the Monopoly Watch, a non- governmental organization that filed the case against Cineplex 21 with the commission, was not satisfied with the ruling, saying it fell far short of her organization's expectations.

"The KPPU should issue further rulings against Cineplex 21's business practices not only in Surabaya but also in other cities across the country, especially in Jakarta, in which the unhealthy competition is very obvious," she said.

She said her organization had counted that of all movie screens, not theaters, across the country, about 59 percent were owned by the Cineplex 21 group, while in Jakarta its ownership reached about 70 percent.

The commission was not immediately available to comment on the subject raised by Refi.

Meanwhile, KPPU dismissed allegations of monopolistic practices filed against PT Camila Internusa Film and PT Satrya Perkasa Esthetika Film due to a lack of evidence.