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The ongoing dispute between Mr Video and Nu Metro is heading to the competition commission, where the home rental DVD company will challenge what it describes as anti-competitive behaviour by the cinema chain.

June 24, 2008

By Thabiso Mochiko

Johannesburg – The ongoing dispute between Mr Video and Nu Metro is heading to the competition commission, where the home rental DVD company will challenge what it describes as anti-competitive behaviour by the cinema chain.

Nu Metro is a subsidiary of JSE-listed media group Avusa.

Mr Video’s decision comes after the Cape high court ruled in favour of Nu Metro yesterday. It ordered Mr Video and 22 of its franchises to hand back all the zone 1 US DVDs that were imported without Nu Metro’s consent. Nu Metro is the licensed local distributor for movies produced by companies such as Fox and Disney.

Mr Video was ordered to pay undisclosed costs to Nu Metro and the movie houses.

Chief operating officer Andre Grobler said Mr Video would seek leave to appeal. It would approach the commission to challenge the “anti-competitive landscape of the DVD industry”. He did not believe the ruling reflected the industry’s complexities.

Mr Video, which has 230 stores nationwide, will lodge a complaint on behalf of all franchisees. “Restrictive business practices cannot be allowed to continue in a country where it is a national prerogative to ensure the survival of small business,” said Grobler.

In yesterday’s ruling, the judge slammed Mr Video, saying it had ample opportunity to avoid the court proceeding. It knew it had no valid defence. The “delay of the inevitable” amounted to an abuse of the processes of the court for the company’s commercial gain.

Nu Metro’s investigations found that Mr Video and some franchisees had infringed copyright by importing at least 100 new titles, including Juno and There Will Be Blood, without the consent of studios, which own the copyright. Some titles were released for rental before their release in cinemas.

Fay Amaral, the managing director of Nu Metro Entertainment, said the company did not believe it had acted anti-competitively.