LONDON — British film distributors are facing fresh scrutiny of their trading practices from the Office of Fair Trading, the U.K.’s competition watchdog.
The OFT has announced a review of the antitrust rules that it imposed upon distribs after two previous investigations — one in 1983 and one in 1994.
These enquiries resulted in so-called “orders” that banned deals between distribs and exhibs covering more than one film, and prevented distribs from forcing cinemas to book any firstrun movies for more than two weeks at a time.
Under new legislation introduced last year, the OFT is obliged to review all its orders after a certain period of time, to discover how they are functioning and whether they are still appropriate for the changing marketplace.
An OFT spokesman said that the decision to look again at the film distribution sector was therefore “neutral,” and did not arise from any specific concerns.
Nonetheless, the OFT’s move has been welcomed by Stelios Haji-Ioannou, who has been calling on the watchdog to investigate the refusal of U.K. distribs to supply firstrun movies to his experimental easyCinema in Milton Keynes.
“I believe that the tacit collusion of the Hollywood studios and their distributors has maintained artificially high prices to consumers,” commented Stelios (who prefers to be known by his first name).
“Prices of cinema seats should be brought down so that more people can go to the cinema more often. With a larger market, cinemas, distributors and the Hollywood studios can make money while offering consumers a good deal.”
But Stelios may be disappointed in the scope of the OFT’s latest enquiry, which will focus exclusively on how the two previous orders are operating.