Zee-Sony Agree To Sell 3 Hindi Channels To Address Anti-Competition Concerns

The Competition Commission of India (CCI) has approved the proposed merger of Sony Pictures Networks India and Zee Entertainment Enterprises subject to modifications to address its concerns regarding the deal. The CCI said the companies have agreed to divest three Hindi channels — Big Magic, Zee Action, and Zee Classic — which will be acquired by an independent party. The CCI had raised concerns about the deal because of its potential to create an entity with adverse competitive effects on the media and entertainment sector. It said that after the proposed merger, Sony will have a market share of around 40% in HSM (hybrid satellite direct-to-home) television viewership in India, which is higher than what is permissible under competition law. The CCI said the proposed deal was likely to result in a significant reduction in competition in the broadcast and distribution of television channels, as well as content creation. It also said that there would be a loss of competitiveness at the advertiser level due to a reduction in advertising rates and an increase in advertising revenue for Sony Pictures Networks India (SPN). The merger, if cleared by the Competition Commission of India (CCI), would give Sony Pictures Networks India a 40% share of the HSM market. The deal also had implications for content creation and distribution in India’s media industry.