Today, Vietnamese teenagers crowd into multiplexes showing international hits such as Avatar with first-rate dubbing or subtitles, Dolby sound and even 3D. And now, Vietnam's cinema market can claim another sign of maturity: an antitrust action.

MegaStar Media , Vietnam's top distributor of foreign films, is facing an anti-competitiveness complaint from six cinema owners that say it is abusing its dominant position to gobble up market share for its own theatre chain.

The cinema owners include Galaxy Media, which operates in Ho Chi Minh City in addition to smaller cinemas in poorer parts of Vietnam. They say that where MegaStar once demanded half the ticket price as a royalty, last June it set a minimum fee of 25,000 dong ($1.30, €1.07, £0.90) per ticket. Lower-end theatres that charge 25,00040,000 dong a ticket say they cannot make a profit on foreign films at that price.

Vietnam's movie market is still small, with 100 screens nationwide, and reliable data on box office receipts are available only for the bigger hits. But PwC, the professional services firm, last year estimated that nationwide box office take would rise from $2m in 2007 to $7m this year.

However, those estimates were made before Avatar , the highest-grossing foreign film ever shown in Vietnam. It has made an estimated $1.5m so far, with most of it on MegaStar's 3D screens. Figures from cinema owners put the total box office take in 2009 at $12.3m. Certainly, MegaStar has done more than any other company to bring Vietnam into the modern cinema world. The chain was the first to release big-studio features on their international release date.

But the cinema owners' group alleges MegaStar is leveraging that position to corner an ever larger share of the market, and that its high royalties aim to squeeze out other cinema owners in favour of its own chain in Ho Chi Minh City, Hanoi, Haiphong and Danang where tickets run as high as 200,000 dong.

"We think there is a breach of the primary market dominant position by MegaStar," said Duong Nguyen Y. Linh, a lawyer representing the six cinema owners.

The Vietnam Competition Administration Department has launched an investigation into the charges.

Eng Hee Lim, general manager of MegaStar, said the company received official notice of the investigation but declined to comment on the case. Cinema owners will have to prove that MegaStar has a dominant market position.

Vietnam's Law on Competition , passed in 2005, stipulates that any vendor who controls more than 30 per cent of the market is exercising a dominant position. But the government has never clarified whether this figure refers to product sold, number of clients or geographical area, making it difficult for complainants to prove their case.

Charging a flat royalty fee seems unusual for a distributor in an emerging market, where income levels and ticket prices vary sharply between regions.

Several distributors in larger south-east Asian markets said they charged percentages of the ticket price rather than flat fees.

The past five years have seen the launch of an independent industry in Vietnam. Khoa Nguyen, a Vietnamese-American writer-director whose "rom-com" 14 Days debuted last year, said budding domestic producers owed much to greater exposure to imported films.

"People are seeing the quality of the films out there and saying, wow, these are interesting stories," Mr Nguyen said. "They're a lot more savvy than they were."

Bac Van Mung, VCAD director, says the department expects to make an initial finding in the MegaStar case within 30 days.

By Matt Steinglass- The Financial Times - May 29, 2010