Competition Law Research On Motion Picture Industry

The film industry is an important part of culture industry in the national economy.It is also playing an increasingly important role in the national economy, and thedevelopment of the film industry depends on the fair and free market competitionorder. Today, Chinese film industry, exists many alleged violations of anti-monopolylaw behaviors, these behaviors constitutes a serious obstacle to the development ofmotion picture industry. The antitrust law enforcement agencies should pay attentionto anti-competitive behavior in the motion picture industry combined with the filmindustry's own characteristics and the efficiency of the alleged anti-competitivebehaviors. At present, there is no Chinese scholar nor institution has conductedsystematic research on the film industry from the perspective of competition law. Sothe purpose of this article is to fill this gap, and make the theoretical support for theantitrust enforcement in motion picture industry. This article takes the application ofcompetition law in movie industry as the main line. The article contains four mainparts with the total of seven chapters:The first part of the article is chapter one, The Introduction. Chapter onedescribes the significance of the topic, the research methods and framework of thispaper, and also makes an analysis of the novelty of this article.The second part of the article includes the second chapter. Chapter two is aboutthe operation of film industry. First of all, this chapter will introduce the three mainscope of film industry: production, distribution and exhibition. Based on this, thischapter will study on the operation model of three scope and how the enterprise inthese scope make profit. On this basis, the Chinese, U.S. and European Film Marketin production, distribution and exhibition market structure will be analyzed andcompared, including aspects of market structure and market concentration, marketentrance barriers, buyer power and so on.The third section includes chapter three to chapter seven. After the study ofcoordination of industry policy and competition policy, the third part of this articlewill turn to technical issues in motion picture industry.The third chapter studies the coordination of competition policy and industrypolicy in motion picture industry. The development of the film industry needs both industry policy and competition policy. However, in the implementation process ofthese two policies, they often conflict with each other. This situation is not unique toChina, in the United States and the European Union the law enforcement agenciesalso encountered the same problem. the experience of United States and the EuropeanUnion tells us that: it is needed to coordinate these two policies on the principal oftaking competition policy as the basic and taking industry policy as supplement.Industry policy relies mainly on administrative measures to be implemented, therefore,coordinated industrial policy and competition law is to coordinate the relationship ofenforcement agencies between industry policy and competition policy. Summary ofnational experiences in dealing with the relationship between competition lawenforcement and industry regulatory regime will find that in order to achieve the bestresults in the abuse of dominant position, agreements restricting competition,competition law enforcement should take priority, while industry policy should be asupplement. In the area of merge control, competition policy should be exclusivelyused.The fourth chapter studies the film industry business concentration problems.Defining the relevant market is the first step in this chapter. It is directly related to theinfluence of the concentration on competition in the market. Some factors that need tobe special treated in defining the relevant market in the film industry, such as: timefactor and traffic factor. Vertical concentration is the trend of motion picture industry,although vertical concentration may bring in some of the enterprises have dominantposition, it would also promote innovation in motion picture industry and benefitconsumers.Chapter Five is about the analysis of monopoly agreement in movie industry. Thedisruption and restrictive effect of Monopoly Agreement against competition isobvious, and monopoly agreement is most harmful to competition. Therefore, thecompetition law of all countries regarding monopoly agreement is the strictest, so it isin the movie industry. The concept and the constitutive requirements of monopolyagreement will be first discussed and analyzed in this chapter, and then, the horizontalmonopoly agreements and vertical monopoly agreements will be analyzedrespectively. The horizontal monopoly agreements in movie industry always are theagreements signed by multiple enterprises, which are regarding boycott transactionsand fixed purchased price of the products of upstream or downstream enterprises. Thevertical monopoly agreements in movie industry always are the agreements which fixing the transaction price by the upstream enterprises. The particularity of movieindustry is that, the split-account public measure of movie makes the restriction of thetickets price by the producer and public enterprise different from the verticalmonopoly agreement in other industries, however, the price restriction is actuallyinevitable at the same time when the movie tickets price are determined by the publicenterprises and cinemas, which will be further discussed in this chapter mainly fromthe perspective of market structure and combined with the theory of microeconomicand cases.The issue of abusing of dominant market status in movie industry will beanalyzed in chapter Six. The enterprise is likely to abuse the dominant market statuswhen obtaining such power, which will be against the market innovation andcompetition, and so it is in the movie industry. In general circumstance, the producersare hardly to obtain the dominant market status, therefore, the behavior of abusingdominant market status of producer, pubic and cinema enterprises will be discussedrespectively. In this chapter, the antitrust case of Paramount Pictures will be mainlyintroduced, and the reason why the USA eight studios enterprises obtaining thedominant market status, the damage caused and the remedy awarded by the supremecourt of the United States in such case will be analyzed. Thereafter, this chapter willfocus on the analysis of the negative effects caused by the splitting-cinema remedyawarded by the supreme court of the United States and the reason why such remedywas failed. The analysis of abuse of market dominant status in this chapter will pavefor the analysis of transaction cost economics in chapter Seven.The Seventh Section is an economical study of transaction costs ofanti-competitive regulations in the film industry by taking the Paramount Case astypical example, in order to find remedies that can both realize the competition orderand efficiency in film industry. This section begins with an introduction of thefunction of the economical study of transaction costs in legal analysis. As an organiccombination of behavior analysis theory, economic operation regular and psychology,the economical study of transaction costs tries to find out the mistakes and omissionsin the traditional economic model, which acts as the economic theory foundation ofpresent anti-competitive regulations. The use of economical study of transaction costsof anti-competitive regulations in the film industry is just to find out the mistakes inpresent anti-competitive regulations, which comes with the traditional economicmodel, and theoretical supports for amending these mistakes. The Forth part is the conclusion. In this part, it comes to a conclusion of thediscuss from the Second Section to the Sixth Section, by finishing the theoretical andpractical study in the Second and Third Part. Firstly, in the film industry, thecompetitive policies shall be the fundamentally primary consideration, and theindustry policies serve as a preferred complement. Secondly, Because of the specialfeatures of the products of film industry, it shall be fully taken into consideration ofthe differences between movies, geographical factors and time factor in thesegmentation of relevant markets. Thirdly, because of the special features in filmindustry operation,Finally, vertical integration in the film industry brings higher efficiency, whichshall be respected by the executor of competitive regulations in the enforcement oflaw. Only respecting above principles in the enforcement of competitive law, can itachieve a win-win end between legislative goals and healthy development of filmindustry.