Companies took advantage of market dominance

SEOUL — South Korea’s Fair Trade Commission has found the nation’s largest exhibitors and distributors guilty of unfair business practices.

A probe by the watchdog found that CJ CGV, Lotte Cinema, Megabox and Primus Cinema had taken inappropriate advantage of their dominant market position in the years 2004-07.

The unfair business practices included canceling the screening of unpopular pics, giving them less than the standard one-week minimum run; changing the terms of division of revenues between themselves and distributors; and passing out $29 million in free tickets over 2½ years without consulting distributors.

The exhibitors were also accused of colluding on ticket prices. The commission will investigate further and decide on possible punitive measures.

As of 2006 the four major exhibitors accounted for 54.7% of the nation’s screens and 70.1% of its ticket revenues.

At the same time, the commission reprimanded five major distributors — CJ Entertainment, Showbox, Sony Pictures-BVI Korea, Universal Pictures Korea and 20th Century Fox Korea — for their dealings with smaller exhibs and regional theaters.

The distributors are accused of demanding the immediate division of revenues instead of waiting the standard 30 or 45 days after the end of a film’s run.

“As the major multiplexes’ control over the market has expanded in recent years, the number of unfair business practices has increased,” said FTC head of market supervision Kim Won-jun. “We hope that this investigation will lead to a more transparent and fair business environment in the exhibition and distribution sectors in the future.”

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