Canada's two principal exhibitors, Famous Players and Cineplex Odeon, are under investigation by the country's Competition Bureau for possible collusion.
The two chains are the dominant players in Canada, with more than 1,600 of the nation's 2,400 screens. Both are controlled by US-based parent operations: Famous Players is a unit of Viacom, Cineplex Odeon is a subsidiary of Loews Cineplex.
Affidavits filed in the Federal Court by the Bureau allege the companies are not bidding against each other for Hollywood product and thus inflating ticket prices. Lawyers for the bureau are seeking to open the books of 17 film distributors for financial analysis.
Cineplex-Odeon CEO Allen Karp has dismissed the allegation as "nonsense", citing as evidence the dire financial circumstances of North American exhibition. Three major US circuits have sought bankruptcy protection this year; Loews Cineplex is itself on bankruptcy watch.
The investigation was precipitated by a complaint from Quebec-based independent chain Guzzo Cinemas, a 10-theatre circuit, which alleged it was the ultimate victim of pressure tactics brought to bear by Cineplex Odeon on a local distributor. None of the allegations have been proved in court.