A hearing will start involving a complaint brought by the Competition Commission in 2009 in which it alleges that Primedia’s Ster-Kinekor Theatres and Avusa’s Nu-Metro Entertainment (Pty) Ltd "engaged in market allocation with regards to lease agreements at the V&A Waterfront shopping complex".
The two companies are the two biggest competitors in the film exhibition market.
In May 2009 Avusa applied for conditional immunity and "provided evidence of the existence of collusion in the film exhibition market at the V&A Waterfront shopping complex in Cape Town," the commission said in a statement.
"A lease agreement was entered into by Nu Metro with its then landlord Transnet Pension Fund, wherein Nu Metro had an oral right of first refusal in relation to any film exhibition on the Waterfront premises. When Nu Metro discovered that there were negotiations with Ster-Kinekor, about the operator also operating at the Waterfront Shopping Complex, Nu Metro filed an interdict at the High Court. Nu Metro and Ster-Kinekor later entered into a settlement agreement, that was subsequently made an order of the court, in which Nu Metro would withdraw its objection to Ster-Kinekor’s lease agreement and that Nu Metro would only show commercial films while Ster Kinekor could only show subtitled or art movies," the statement said.
The Commission believes that this deal amounts to market allocation, and is asking for 10% of Ster-Kinekor’s annual turnover.