The Competition Commission of India has begun its first cartel investigation since it was granted full powers, following Luthra & Luthra's petition on behalf of the multiplex cinemas over their long-running dispute with Bollywood film producers and distributors.

Luthra & Luthra is understood to be representing a trade body consisting of the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Multiplex Operators Association of India against the United Producers-Distributors Forum.

The Competition Commission is understood to have directed an investigation yesterday following the cinema operators' allegation that the producers and distributors were running a cartel.

The multiplex cinema chains had been involved in a bitter dispute on revenue sharing with the movie makers and distributors.

In protest, the cinemas went on strike, which resulted in a two-month long drought of big-studio releases in India, estimated to have cost the Indian film industry over Rs 300 crore ($63m).

The dispute was settled last month but it is understood that the petition to the Competition Commission was part of the negotiating strategy to strengthen the multiplexes' hand.

Since settling the dispute last month, a raft of Hollywood and Bollywood releases have now flooded Indian multiplexes, including domestic hit thriller New York (pictured).

Luthra & Luthra declined to comment.