08/01/2009

Yesterday, the Competition Authority of Portugal – which oversees regulation on competition in all financial sectors – moved to suspend the myZONcard for a period of 90 days, following a complaint submitted by producer and owner of the exhibition chain Medeia Filmes, Paulo Branco.

The reasons behind the complaint were the promoted advantages of the myZONcard. Officially launched on January 1, the card was meant to offer one free ticket per week to clients of local cable broadcaster ZON TV Cabo. The tickets could be used in the Lusomundo cinemas in Lisbon, Oporto, Braga, Vila Real, Coimbra, Setúbal and Viseu, at an overall 200 screens.

Zon Lusomundo theatres usually offer films considered to have big box office potential, and are released by distribution arm Lusomundo. The company released the most successful title of 2008 (Mamma Mia!, 846,477 admissions through December 18) and the most seen Portuguese film of the year, Amália (nearly 80,000 admissions – see news).

According to the Competition Authority, during the 90-day suspension, there will be an investigation of whether there was indeed abuse of its dominant position on the part of ZON Lusomundo, whose goal was to restrict or block competition in exhibition. There seems to be “a risk of negative anti-competition effects, which could lead to imminent, serious damage” for other exhibitors and consumers.

ZON TV Cabo called the decision “unjustified and damaging to consumers”, as the card was conceived to enhance local distribution and exhibition activities. It aimed to “expand the market” by rebuilding audiences and stimulating competition. ZON will now appeal the Competition Authority’s decision.

Branco presented the complaint in December 2008 – before the card was officially launched – in an attempt to prevent what he called a “threat to the local exhibition sector”.