The Turkish Competition Board’s Mars Decision: Vertical Competition Concerns and Commitments in the Movie Screening Market

Parties to the Investigation and the Board’s Assessment of Whether They Constitute a Single Economic Unit

The parties to the investigation, namely Mars Entertainment Group AŞ (“MEG”) and CJ ENM Medya Film Yapım ve Dağıtım AŞ (“CJ ENM”) (together, the “Mars Group”), are ultimately controlled by the South Korea–based CJ Corporation.

MEG’s activities consist of operating the business of Mars Sinema Turizm ve Sportif Tesisler İşletmeciliği AŞ (“Mars”). Mars operates in the distribution stage of the cinema industry through CGV Mars and in the screening stage under the Paribu Cineverse brand. In addition, under the Mars Medya brand, Mars carries out the sale and marketing of on-screen advertising for certain cinema chains with which it has contractual arrangements. Mars began its activities in the field of cinema film screening in 2001 under a different control structure and expanded its scope of activities in 2011 by acquiring AFM Uluslararası Film Prodüksiyon Ticaret ve Sanayi AŞ[3]. As of 2014, Mars also started operating in the film distribution market under the CGV Mars brand.

CJ ENM was established in 2017 with the aim of carrying out the production, distribution, and marketing of all types of content, including feature films, television series, and internet films. In the same year, CJ ENM entered the film production market through joint film production and investment activities with Beşiktaş Kültür Merkezi AŞ, and as of October 2018, it also commenced film distribution activities. CJ ENM has no activities in the movie screening market, nor does it have any subsidiary operating in the screening segment of the cinema industry.

In examining whether Mars and CJ ENM formed part of the same economic unit within the scope of the investigation, the Board did not confine its assessment to shareholding links alone; it also took into account previous Board decisions[4], the companies’ governance structures, and, in particular, data relating to employee transfers between Mars and CJ ENM. The fact that, during CJ ENM’s establishment and structuring process, a significant number of employees—including senior executives—moved from Mars to CJ ENM was regarded by the Board as an important indication of an internal restructuring within a single undertaking. Findings from on-site inspections showing that employees of both undertakings used a corporate email domain belonging to the CJ Group were also considered among the elements supporting the conclusion that the undertakings formed part of the same economic unit. Nevertheless, in order to set out the competitive concerns more clearly in the specific case at hand, the Board considered it appropriate to assess and evaluate the data relating to Mars and CJ ENM separately in its analysis.

Relevant Market Definition

Activities in the cinema industry are examined across three main stages[5]: (i) production, where an idea is transformed into a film; (ii) distribution, where the completed film is delivered to locations in different regions; and (iii) screening, where the film is presented to the final consumer. As these activities address different needs and different market participants (producers, distributors, exhibitors, and final consumers), they cannot be regarded as substitutes for one another in terms of purpose and characteristics. The Board’s previous decisions also reflect a consistent approach whereby production, distribution, and screening activities are treated as separate relevant product markets[6]. The focus of the investigation is the allegation that the Mars Group could exclude competitors in the distribution market by leveraging its power in the screening market in favor of its distribution activities, through parameters such as screening programming, location/screen allocation, and time-slot allocation. For this reason, the activities involved in the vertical relationship were assessed separately, in line with the Board’s established case-law. In this context, particular attention was paid to whether alternative screening channels (such as streaming platforms) are substitutable for cinema screening. Based on the assessment carried out within the scope of the case file, it was concluded that alternative channels are not substitutable for cinema screening, given that for small and medium-sized producers, cinema screening constitutes a critical “stepping stone” in terms of gaining visibility and access to subsequent screening channels, and for audiences, cinema offers a unique experience through its atmosphere, large screens, and advanced visual and sound technologies, while also serving a social function. In light of these findings, the relevant product markets in the present case were defined as (i) the market for cinema film screening services and (ii) the market for the distribution of films for screening in cinemas.

With regard to the relevant geographic market, the Board’s previous decisions show that, in the screening market, geographic market definitions may be made at the level of Turkey as a whole, a province, a region, or even a district, depending on the specific characteristics of the case, whereas in the distribution market the geographic scope has predominantly been defined at the nationwide level[7]. In the present case, the relevant geographic market was defined as Turkey for both the screening market and the distribution market.

Dominance Assessment by the Board

Within the scope of its assessment of dominance, the Board examined (i) Mars’s position in the market, (ii) conditions of entry into and expansion in the market, and (iii) the bargaining power of buyers.

1. As regards market position, the Board found that Mars held high and stable market shares nationwide in terms of total box office revenues and audience numbers over the period 2015–2024, and that the gap between Mars and its closest competitors was maintained during the 2020–2024 period. It was also established that, in Istanbul, Ankara, and Izmir (which account for a significant share of ticket revenues and audience concentration in Turkey) Mars held the highest market shares in terms of both box office revenues and audience numbers, with a clear margin over its competitors. In addition, the Board noted that Mars consistently maintained its leading position in the market during the 2020–2024 period based on capacity indicators such as the number of locations/cinemas, the number of screens/halls, and seat capacity.
2. With regard to barriers to entry and expansion, the Board noted that, while there is no direct legal barrier to entry in the screening market, the shopping mall–oriented structure of the sector may in practice limit opportunities for market entry and growth. The Board further observed that fixed rent obligations and ancillary costs associated with shopping malls create significant financial pressure on exhibitors, particularly during low seasons, which may weaken the incentives for entry and expansion for undertakings with limited financial resources. In this context, it was noted that Mars’s affiliation with the CJ Group provides it with financial and operational capacity that may confer a significant competitive advantage in operating in high-cost locations. Brand recognition (Cinemaximum/Paribu Cineverse), investments in cinema halls differentiated in terms of technology and comfort, low occupancy rates, and the limited degree of chain expansion were also assessed as factors constituting barriers to effective market entry and growth.
3. As regards buyers’ bargaining power, the Board identified two distinct buyer groups in the cinema sector: audiences and distributors. On the audience side, it found that viewers do not possess a level of bargaining power that would enable them to switch to alternative providers in a manner that could exert competitive pressure. As for distributors, the Board noted that securing screenings at Mars is, in practice, critical for ensuring that films can enter and remain in release on a sustainable basis. It further assessed that Mars’s bargaining power may become even stronger during high seasons, when capacity constraints intensify. Against this background, the Board concluded that distributors do not possess sufficient buyer power to counterbalance Mars’s conduct.

In light of these findings, the Board concluded that Mars may hold a dominant position in the screening market, given that it has high and stable market shares in terms of ticket revenues, audience numbers, and capacity indicators, that entry into and expansion in the market may be constrained by various structural and dynamic factors, and that there is no countervailing buyer power sufficient to offset Mars’s market power.

The Board’s Findings on Competition Concerns

The Board conducted distributor-based comparative analyses with respect to the key elements of screening programming, namely (i) the availability of films at Mars locations over the entire period during which they remained in release, (ii) their availability at Mars locations during the first week of release, and (iii) their availability during the first week in Mars’s top ten locations generating the highest revenues by film genre. These analyses were assessed together with the films’ average box office performance.

Findings on Location and Time-Slot Allocation: In its assessment, the Board noted that, based on 2023 data, the average availability of films across Mars locations and their first-week location allocation, when examined on a distributor-by-distributor basis, generally evolved in line with the films’ average box office performance. Against this background, the Board stated that it could not conclude that Mars had engaged in discriminatory conduct disadvantaging other distributors in favor of the distribution activities of CGV Mars and/or CJ ENM. By contrast, with respect to 2024 data, the Board found that although films distributed by CGV Mars exhibited relatively lower average box office performance, the average number of locations in which they were screened at Mars cinemas—both over the entire screening period and during the first week—was higher than that of higher-grossing films distributed by competing distributors. It was further observed that films distributed by CJ ENM and A90, which generated higher average revenues, achieved more limited location availability compared to those distributed by CGV Mars. The Board assessed that this pattern, for the year 2024, pointed to a differentiation in Mars’s screening programming in favor of CGV Mars.

Top 10 Locations and Genre-Based Assessments: The Board also examined the availability of films in the top 10 locations in terms of box office revenues by genre during the first week of release. It noted that, as of 2024, films distributed by CGV Mars enjoyed higher availability in the top 10 locations in a manner that could not be explained by their box office performance, whereas higher-grossing films distributed by CJ ENM and other distributors remained at comparatively more limited levels of availability. These findings were further supported by detailed comparisons based on animated films for the week of 8–14 November 2024, which coincided with the school mid-term holiday. For that week, the Board observed that animated films distributed by CGV Mars were allocated screening shares that were markedly higher than their audience shares, while, for CJ ENM’s animated film during the same period, screening shares and audience shares were aligned at similar levels. The Board also took into account that, whereas some animated films distributed by CGV Mars were not included or were included only to a limited extent in the programs of Mars’s five closest competitors, Mars was nevertheless able to allocate a high number of screenings and locations to those same films. In addition, by comparing two specific films, the Board assessed that a film supported by more favorable screening conditions in the first week could continue to benefit from certain advantages in second-week programming as well.

Revenue Shares and the Impact of Mars Screenings on Distributors’ Revenues: As an additional indicator, the Board examined the share of screenings at Mars cinemas in the total revenues that distributors derived from the films they distributed. It noted that, as of 2024, the portion of the revenues generated by films distributed by CGV Mars that stemmed from screenings at Mars cinemas diverged both from Mars’s revenue-based share in the screening market and from the levels observed in previous years and for other distributors, exceeding those levels by a significant margin. The Board further observed that, over the 2022–2024 period, the share attributable to Mars screenings exhibited a downward trend for many distributors, whereas a notable increase was recorded for CGV Mars. While increases in the share for certain distributors could be linked to concrete developments, the Board considered that the increase observed for CGV Mars could not be explained on that basis.

As a result, the Board assessed that, particularly with respect to 2024, the analyses concerning location/time-slot allocation and key locations revealed a pattern indicating that Mars differentiated its screening programming in favor of films distributed by CGV Mars. In this context, the Board found that such a pattern gave rise to concerns regarding the effects of market power in the screening market on the distribution market and that such conduct could constitute a competition concern within the scope of Article 6 of Law No. 4054.

The Board’s Assessment of the Commitments and Conclusion

Against this background, the Board examined the commitments submitted by the parties to the investigation with a view to addressing the competition concerns identified in the case file. Concluding that the commitments were proportionate to the competition problems and suitable to eliminate the concerns, the Board decided to terminate the investigation on the basis of the commitments. The commitments submitted by Mars, to be implemented for a period of three years, may be summarized as follows:

• With respect to the continuation of films in screening in subsequent weeks, objective criteria prioritizing consumer preferences will be applied, ensuring that screening programming is based on audience demand irrespective of the distributor of the film.
• For newly released films, no more than 20% of the seats allocated for screening will be reserved for films distributed by CGV Mars, while at least 80% of the capacity will be allocated to films distributed by distributors other than CGV Mars.
• These commitments will also apply to the top 10 highest-revenue locations, thereby ensuring the availability of films distributed by other distributors in Mars’s most prominent locations.
• In the implementation of the commitments, all distribution companies, including those forming part of the same economic unit as Mars, will be treated objectively and equally, and discriminatory practices will be avoided.
• Upon request by distributors, Mars will share performance data (such as the number of tickets sold, occupancy rates, revenues, etc.) in order to enhance transparency.
• Data relating to the screening programming method will be reported to the Authority at the end of each commitment year.

The commitments submitted by CJ ENM, likewise to be implemented for a period of three years, may be summarized as follows:

• Mars and CJ ENM currently operate as separate legal entities with different board members, directors, managers, and employees, and CJ ENM committed to preserving this separate organizational structure.
• Communication between CJ ENM and Mars will be limited to the level of ordinary commercial relations between third-party distributors and exhibitors, and no confidential commercial information or competitively sensitive data will be shared.

In conclusion, the commitments submitted by Mars to eliminate the competition concerns are centered on the establishment of a seat-capacity-based quota mechanism for film programming in Mars cinemas, the application of objective criteria for subsequent screening weeks, the introduction of additional safeguards with respect to the top 10 highest-revenue locations, and a strict non-discrimination principle. The Board decided to terminate the investigation, finding that the commitments were proportionate to the competition problems identified in the case file, capable of addressing those problems, capable of being implemented within a short timeframe, and effective in practice.

The decision further stated that a three-year commitment period was “reasonable in order to monitor recent developments on both the supply and demand sides of the screening market and to observe how the market structure may evolve in the near future.” With this decision, one of the four investigations[8] concerning the cinema sector that had been conducted by the Board and attracted public attention was concluded. The decision constitutes a current reference point for the competition law assessment of vertical relationships in the cinema sector.

[1] Attorney Gülce Korkmaz is the external competition law consultant of Baş | Kaymaz Law Firm. After completing her master’s degree at Bilkent University, she is currently pursuing her doctoral studies in the field of competition law at the Faculty of Law of Lüneburg Leuphana University (Germany) as a PhD researcher with the scholarship of the Joachim Herz Foundation.

[2] TCB Decision dated 14 August 2025 and numbered 25-31/745-443. For the Board’s reasoned decision on the case, please see here (only available in Turkish).

[3] The transaction whereby MARS acquired the majority shares of AFM, and Esas Holding AŞ which exercised sole control over AFM, acquired 50% of the shares of Spark Entertainment Ltd. Şti., which exercises joint control over Mars Sinema, was approved by the Board through the acceptance of the commitments submitted by the parties, by its decision dated 17 November 2011 and numbered 11-57/1473-539.

[4] TCB decision dated 7 February 2019 and numbered 19-06/63-26 (Cinema Distributors decision).

[5] For a detailed overview of the structure of the sector, see the Turkish Competition Authority, Cinema Sector Report (available in Turkish only).

[6] November 2015 and numbered 15-41/682-243, the relevant product markets were determined as the “market for the distribution of films for screening in cinemas” and the “cinema hall services market”. In its decision dated 1 June 2016 and numbered 16-19/317-144, the relevant product markets were defined as the “market for the distribution of films for screening in cinemas”, the “cinema hall services market”, the “on-screen advertising market”, and the “market for 4D film screening systems”. In its decision dated 23 June 2016 and numbered 16-21/371-173, the relevant product market was accepted as the “cinema hall services market”. Finally, in its decision dated 7 February 2019 and numbered 19-06/63-26, the relevant product markets were defined as the “market for the distribution of films for screening in cinemas” and the “market for cinema film screening services”.In its decision dated 17 June 2005 and numbered 05-40/556-135, the Board defined the relevant product market as “cinema hall services”. In its decision dated 8 March 2007 and numbered 07-19/192-63, the relevant product market was defined as the “distribution of films for screening in cinemas”. In its decision dated 17 November 2011 and numbered 11-57/1473-539, the relevant product markets were defined as “cinema hall services”, “multiplex cinema hall services”, and “traditional/shopping mall cinema hall services”. In its decision dated 12 September 2014 and numbered 14-32/654-289, the relevant product markets were addressed as the “film production market”, the “market for the distribution of films for screening in cinemas”, and the “cinema hall services market”. In its decision dated 20

[7] With respect to geographic market definition, the Board’s decision dated 17 June 2005 and numbered 05-40/556-135 defined the relevant geographic market for cinema hall services on a province-by-province basis, identifying Ankara, Adana, Istanbul, and Konya as separate geographic markets. In its decision dated 17 November 2011 and numbered 11-57/1473-539, the Board took Istanbul, Ankara, Izmir, and Antalya as the relevant geographic markets for cinema hall services, while defining a nationwide geographic market for multiplex cinema hall services; for traditional/shopping mall cinema hall services, geographic markets were identified at district and sub-regional levels, such as West Ankara, Ümraniye, Etiler-Levent, Şişli, and Taksim-Beyoğlu. In its decision dated 12 September 2014 and numbered 14-32/654-289, the relevant geographic market for the distribution of films for screening in cinemas was defined as Turkey, while a separate geographic market assessment was carried out for the cinema hall services market. In its decision dated 20 November 2015 and numbered 15-41/682-243, a nationwide geographic market was adopted for the distribution of films for screening in cinemas, whereas West Ankara and the Antalya region were taken as the relevant geographic markets for cinema hall services. In its decision dated 1 June 2016 and numbered 16-19/317-144, the relevant geographic market was defined as Turkey for both the distribution of films for screening in cinemas and the cinema hall services market; for the market for 4D film screening systems, Turkey as a whole, as well as the provinces of Istanbul, Ankara, and Izmir, were assessed separately. In its decision dated 23 June 2016 and numbered 16-21/371-173, various geographic market definitions were adopted for the cinema hall services market, including Turkey, West Ankara, Etiler-Levent, Şişli, Kadıköy, Ataşehir, and Ümraniye. Finally, in its decision dated 7 February 2019 and numbered 19-06/63-26, the Board accepted Turkey as the relevant geographic market for both the market for the distribution of films for screening in cinemas and the market for cinema film screening services.

[8] For information on the other ongoing investigations, see the Turkish Competition Authority’s public announcement entitled “Public Announcement on the Investigations Conducted in the Cinema and TV Series Sector” dated 4 March 2025 (available in Turkish only).

As Baş | Kaymaz Law Firm, we provide comprehensive competition law, advice and representation services to both national and multinational companies with our specialized and experienced lawyers.

If you have any questions on this topic or any matter related to Turkish competition law, you may contact us via [email protected].