No Unfair Trade Practice from Star and Airtel: SC

The Supreme Court of India recently ruled that there is no basis to conclude that Star India (P) Ltd. (“Star India”) and Bharti Airtel Limited (“Airtel”) colluded to finance the prize money for the ‘Har Seat Hot Seat’ (“HSHS contest”) contest during the telecast of program ‘Kaun Banega Crorepati’ (”KBC”) in 2007 from the SMS revenue earned by Airtel.

“…………there is no basis to conclude that the prize money for the HSHS contest was paid directly out of the SMS revenue earned by Airtel, or that Airtel and Star India had colluded to increase the SMS rates so as to finance the prize money and share the SMS revenue, and the finding of the commission of an “unfair trade practice” rendered by the National Commission on this basis is liable to be set aside”, the Court said.

The Court mentioned that The National Commission’s reliance on a newspaper report regarding the amount of revenue and profit earned by the appellants from the HSHS contest was unwarranted, in as much as there was absolutely no corroboration for the allegations therein with respect to the number of SMSs received, and the breakup of revenue earned into cost, value addition from service, and profit.

After reviewing the services-cum-sponsorship agreement between the appellants, the Court said there is no provision in the agreement for revenue sharing between the parties, or requiring Airtel to finance any part of the prize money paid by Star India towards the HSHS contest.

During HSHS contest, the viewers of KBC were invited to participate by answering an objective type question with four possible options during each episode, and viewers who wished to participate were required to send in the correct answer, inter alia through SMS services, offered by Airtel and other providers.

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