BookMyShow, PVR ordered to pay Rs 25,000 compensation for unfair 'internet handling charges'

The commission also ordered a penalty of Rs 5,000 to be paid by the website and the multiplex chain towards consumer legal aid and Rs 1,000 for the cost paid for litigation by the complainant. The commission restrained BookMyShow and PVR cinemas from collecting more than Rs 6 for internet handling charges as stipulated by the government of Andhra Pradesh and Telangana.

The complainant Vijay Gopal, a resident of Tarnaka purchased two movie tickets on the BookMyShow platform for Rs 341.78 including Rs 41.78 under the head 'internet handling charges'. The complaint alleged that the opposite parties are charging 14 to 18 per cent extra over and above the legally authorised ticket price for each ticket as handling charges from the consumers.

He further contended that unlike other service aggregators, BookMyShow and PVR cinemas have colluded to burden the consumers with their operational costs, which is not only an unfair trade practice but also in violation of the law.

Reiterating the allegation, BookMyShow said that a case relating to the issue is pending in the Bombay High Court and in the High Court of Andhra Pradesh and Telangana directing against the levy of additional charges for the online computerised ticket sale. They requested that the proceedings are adjourned till the adjudication of the subject matter by the superior courts.

"Also, the services by us are optional and transparent, giving an informed choice to the consumer for online booking of tickets and that the response of RBI and MeitY to the RTI queries by the complainant reveal that internet handling charges are not regulated nor require any authorisation of the statutory bodies/agencies," said BookMyShow. They also said that as charging the consumers for the online services is a legal activity, the petition is devoid of merits and is liable to be dismissed.

PVR cinemas said that the internet handling charges are collected by BookMyShow and as there is no privity of the contract between the consumer and the PVR and so there is no cause of action against PVR.

After observing all the documents and evidence, the commission observed that as per the RBI circular and the Ministry of Electronics and Information Technology (MeitY) notification wherein it is categorically stated that Merchant Discount Rate (MDR) is being absorbed by MeitY by subsidising the banks for digital transactions. This means that there is no need to impose any additional charges on the digital transactions other than those prescribed by the RBI. The internet handling charges for Andhra Pradesh and Telangana is Rs 6 per ticket plus applicable facilitation charges based on Section 6A of The IT Act, 2000. The rules made there under this forum is constrained to hold that the additional amount of Rs 41.78 per two tickets under the head internet handling charges to be an unfair trade practice," said the commission.

The commission also said that BookMyShow charging the extra amount of Rs 20.89 per ticket over and above the ticket price is not a 'pricing' discretion and the action builds discrepancy and hence an unfair trade practice.

"It is unfair and illegal to indiscriminately pass on the costs to the customers in the form of internet handling charges without unbundling the charges imposed on the consumers, especially when the fact that the merchants cannot pass on MDR to its customers was reiterated by the MeitY. The MeitY has categorically stated that no charges or MDR shall be imposed as a pass-through component to the consumers as the internet handling charges are being absorbed by the MeitY by subsidising the banks for digital transactions," observed the commission.

The commission also said that irrespective of their contractual agreement - and whether with consent, connivance of, or whether to be attributable to the PVR – the two are jointly and severally liable to compensate the complainant for the wrongful gain of Rs 41.78 per two tickets under internet handling charges.

After the judgement, the complainant Vijay Gopal said "It is unfortunate that the commission has levied only Rs 5,000 penalty on BMS (BookMyShow) for their 20 years of wrongful gains."

He also added that the commission seemed to have allowed the BMS to collect Rs 6, which is strange as the BMS had not claimed any government authorisation from Telangana or the Government of India during the court proceedings of their supporting documents, affidavits, etc. "They did not have any such information, allowing of collection of any internet handling fee, which has been established as an unfair trade practice and has been illegal as per Section 6A of the IT Act, 2000 of India," added Vijay Gopal.