Cineplex Group accused of unfair business practices

Damar Harsanto, The Jakarta Post, Jakarta

An antimonopoly watchdog filed a complaint with the Business Competition Supervisory Agency (KPPU) over alleged unfair business practices by the 21 Cineplex Group, whose majority shareholder is tycoon Sudwikatmono, a cousin of former president Soeharto.

"We've found indications that the 21 Cineplex Group has abused its power as a dominant force in the market and barred other competitors from entering the market," said Samuel Nitisaputra, executive secretary of non-governmental organization Monopoly Watch.

Samuel alluded to some of the indications such as Cineplex's status as the sole agent in the country to import and distribute foreign films as well as to set movie ticket prices.

"The group often prioritizes movies to be screened at their 21 Cineplex chains first. After all of its outlets get their turn, other cinemas can then screen them," Samuel remarked, adding that such a practice resulted in other cinemas obtaining low admission rates as the movies they screen are old ones.

Monopoly Watch reported that in the course of two years, from July, 2000 to June 2002, 19 movie theaters in seven cities were closed due to bankruptcy including Kencana theater in Plaza Cipulir, South Jakarta, Nelayan theater on Jl. Tegal Alur, West Jakarta, and Johar Baru theater in Johar Baru, Central Jakarta.

Samuel also revealed that the movie chain firm controlled a 100 percent stake in Jambi, Batam in Riau, Denpasar in Bali, Balikpapan and Samarinda in East Kalimantan, and Manado in North Sulawesi. Besides, it also controls the lion's share of the movie market in big cities like Jakarta (61 percent); Bandung, West Java (77 percent); Surabaya, East Java (91 percent).

Meanwhile, KPPU executive director M. Nawir Messi revealed that his commission was still gathering information on the issue.

"We will take 10 days to study the report, while collecting information from other sources. Then, when the evidence is sufficient, we will determine what the next step will be," said Nawir, who also led the team.

Nawir said that his commission would monitor intensively Cineplex's business practices to determine whether or not it was guilty of unfair business practices.

"However, if the evidence is sufficient, we could proceed with further investigation in which the commission could summon the firm for a hearing," said Nawir.

According to Antimonopoly Law No. 5, 1999, those violating the law are subject to a fine of between Rp 5 billion and Rp 100 billion or a six-month prison sentence.