When Choice Becomes Choreography in Captive Commerce

Airports, hospitals, and multiplexes show how modern commerce converts convenience into captivity. India’s regulators must redefine “competition” to restore fairness and dignity in spaces where exit power doesn’t exist.

By P SESH KUMAR

New Delhi, October 25, 2025 — India’s bustling airports, glitzy multiplexes, and gleaming private hospitals stand as symbols of aspiration, convenience, and modern consumerism. Yet, beneath this polished surface lies a paradox: the consumers inside are captive, their freedom to choose replaced by carefully curated dependence.

While some outlets advertise city-like prices and hospitals claim fair billing, systemic restrictions on substitution, transparency, and competition reveal how these enclosed ecosystems distort market discipline. Amid the anatomy of “captive consumption,” competing arguments about real-world choice within such environments may be weighed to find a calibrated regulatory framework to balance business freedom with consumer fairness.

The Captive Consumer Myth

The idea that market choice ensures fair pricing collapses the moment we enter a sealed, single-vendor environment. Inside airports, multiplexes, and hospitals, we move freely, but our wallet may not. This is the paradox of captive consumption—a setting where exit costs, physical barriers, or procedural controls eliminate effective competition.

Airports defend high retail costs by citing rent and security expenses. Multiplexes justify inflated snack prices with ambience and exclusivity. Hospitals explain mark-ups through “service integration.” But when competition ceases to operate within these private enclosures, these justifications morph into a legal gray zone—one where profit margins thrive on inaccessibility rather than innovation.

At the same time, it is true that some retailers have evolved. Many airport food chains like Haldiram’s or Café Coffee Day now advertise “city price same as airport price.” Several international brands display price parity notices, especially after the 2017 government directive requiring uniform MRP for packaged goods. Similarly, pharmacy outlets within some hospital chains claim to adhere to MRP without extra markups. These improvements, though, cover only a fraction of the problem.

The real issue is not just price disparity—it’s choice asymmetry. The presence of a Starbucks or Relay outlet does not equate to real competition when every shop inside the terminal is bound by the same concessionaire and product network.

Similarly, a hospital’s single in-house pharmacy may charge the same MRP as an outside store, but patients cannot choose that outside store without administrative friction or medical risk. Formal equality of price means little when functional equality of choice is absent.

Airports: Freedom Ends After Security

India’s privatized airports have evolved into premium commercial real estate operating under exclusive concession models. A traveller who passes through security leaves the open market behind. Within the terminal, freedom is replaced by curation-every outlet, brand, and price is pre-decided through bidding contracts between the airport operator and a handful of vendors.

Although some airports now claim “city-like pricing,” actual parity is inconsistent. A cup of coffee costing ₹120 in Connaught Place may sell for ₹180 inside a terminal. The difference is defended as a reflection of operational overheads-security screening, rent, maintenance-but these explanations side-step the structural monopoly consumers face post check-in.

The Airports Economic Regulatory Authority (AERA), which governs aeronautical charges, has limited jurisdiction over retail pricing. It regulates landing fees-but not the sandwiches or souvenirs inside. AERA’s successor initiatives to create “Fair Price Zones” have yet to take effect across most facilities. The result is a fragmented regulatory vacuum where self-certification replaces accountability.

In essence, a passenger has “options” only within a controlled catalogue. Parity slogans may blunt perception, but the structure remains monopolistic by design. Price transparency in such contexts is cosmetic, not competitive. There are talks that Government/AAI is introducing Udan Yatri Cafés in some AAI managed airports where snacks and beverages are expected to be sold at rates cheaper than in the outlets in airports run on PPP model in Delhi(next NOIDA), Mumbai, Navi Mumbai, Bengaluru and Hyderabad. But this does not address the concerns of customers of the latter airports.

Multiplexes: The Popcorn Republic

Few industries epitomize the captive consumer problem better than India’s multiplex sector. The polite enforcement of “outside food prohibited” converts leisure into compulsion. At PVR, INOX, or Cinepolis, consumers may technically “choose” between sandwiches or samosas-but never between suppliers.

The Competition Commission of India (CCI) can, under Section 3(4) of the Competition Act, scrutinize exclusive supply contracts that eliminate fair competition. Similarly, under Section 4(2)(a)(i), ibid, it may test whether multiplex chains impose unfair prices by abusing dominance. But enforcement has remained cautious-treating in-house concessions as internal business decisions rather than public interest issues.

State governments have occasionally taken notice. Maharashtra proposed allowing outside food into theatres in 2018—a move that reignited debate over commercial autonomy versus consumer rights. Courts have also recognized that theatres, although private property, serve a public function and thus cannot enforce arbitrary restrictions. Yet, the economics of monopoly persist.

Multiplexes defend mark-ups with the same refrain: high maintenance, rental costs, and mall models. The question is not whether such costs exist, but whether consumers trapped inside are paying competitive rates. Without the right to substitute—say, carrying one’s own water or snack—the notion of choice becomes an illusion dressed as convenience.

Hospitals: Monopoly by Medical Protocol

Hospitals constitute the most ethically complex captive markets because the consumer here is also a patient-vulnerable, uninformed, and dependent. Many super-specialty hospitals institutionalize their captive models through hospital-pharmacy integration. Patients are issued internal prescriptions valid only at the hospital’s own counters. Medicines may be billed at MRP, but diagnostic tests, consumables, and meals show opaque mark-ups.

Hospitals argue this ensures safety, record traceability, and storage compliance. In practice, it centralizes all spending channels under one roof. A study by the National Health Claims Exchange (2025) showed that diagnostic and consumable mark-ups in corporate hospitals often exceed 300 percent compared to street prices.

The National Pharmaceutical Pricing Authority (NPPA) controls maximum retail prices for essential drugs, but hospital retail margins fall outside its direct jurisdiction. The Ministry of Health has not yet standardized billing transparency for in-house consumables. While some hospitals now advertise “same MRP” for common drugs, the patient still cannot exercise real choice-it is logistically and medically unfeasible to step out mid-treatment to buy medicine elsewhere. Thus, even apparent parity hides a deeper dependency: the hospital as regulator, supplier, and buyer rolled into one.

The “Choice” Counterclaim

To be fair, critics of the captive-consumer thesis argue that the modern marketplace is already expanding alternatives. Airports today feature multiple brands, budget food counters, and even water-refill kiosks. Hospitals let patients source discharge medicines externally.

Online ticket apps display food options across cinema chains. Yet, these advances soften rather than solve captivity. Multiple vendors within a closed bidding concession do not equal competition, because their operating terms, locations, and commissions are predetermined by a single authority-the airport operator, multiplex owner, or hospital management. Capture, therefore, occurs at the structural, not retail, level.

The issue is less about whether a Coca-Cola outlet competes with a Café Coffee Day kiosk, and more about whether both share the same captive regulator. Inside an airport, the airside licensing system makes all retailers sub-franchisees of one commercial operator. The “freedom of choice” is therefore curated within a bounded arena where true market entry is pre-decided.

The Regulatory and Legal Anatomy

Experts say that India’s competition law has the conceptual tools but not yet the interpretive appetite to police captive settings. The key may lie in defining the relevant market. Section 19(5) of the Competition Act empowers the CCI to consider product substitutability and geographic confinement. Jurisprudence from Fast Track Call Cab v. ANI Technologies (2017) acknowledged time-bound and location-bound sub-markets. Extending this logic, airports, multiplexes, or hospitals could qualify as distinct “relevant markets” for retail sale, food supply, or medical ancillaries. However, the lack of precedent keeps regulators tentative.

Exclusive supply arrangements—if justified as logistical or operational—escape scrutiny. Sectoral regulators, too, are compartmentalized: AERA for airports, NPPA for drugs, state cinema boards for theatres. None possess cross-sectoral authority to address the shared problem of captive pricing. The result: fragmented vigilance, united negligence.

Towards a Nuanced Regulatory Approach

While “captive markets” may never vanish-the physical logic of protected premises makes them inevitable-they can be disciplined. The answer is not over-regulation, but transparent parity. A Captive Consumer Protection Framework (CCPF) could align business freedom with consumer sovereignty through three layered reforms.

First, a Price Parity Standard: every enclosed commercial complex should display a comparative “street price index” for essentials-water, beverages, snacks, medicines. The rule should allow a maximum margin (say, 10–15 percent) where demonstrable overheads exist.

Second, Functional Alternatives: allow consumers limited liberty to substitute without disrupting operations. Multiplexes can let patrons bring sealed water bottles; hospitals can allow outside pharmacies for non-schedule drugs; airports can maintain “Fair Price Zones” under regulatory supervision.

Third, Cooperative Oversight: establish a Captive Markets Cell under the Competition Commission of India in partnership with AERA, NPPA, and the Ministry of Consumer Affairs. Its mandate-periodic audits, disclosure of concession agreements, and consumer grievance redress within captive premises.

Such a framework would not punish enterprise, only professionalize it. When transparency becomes mandatory, efficiency-not opacity-becomes the profit driver.

Snacks, Screens, and the Supreme Court: The Price of Popcorn and Principles and the counter view

A Supreme Court ruling a few years ago sealed the fate of our movie-time munchies-no outside food allowed in multiplexes, except for reasonable portions for children. The logic? Once we’re inside, we’ve entered a private commercial ecosystem where the twin tests of arm’s length and fair market price take over.

From here, the debate sizzles: cinema and airport vendors claim higher prices stem from security vetting costs, round-the-clock staffing, concession fees, restricted cooking zones, pricey utilities, and shutdown risks. Critics call it daylight robbery. But in law and economics, convenience often comes at a premium. Airports, like multiplexes, must offer free water and restrooms-but the rest is our choice, not our right.

In the end, that ₹400 samosa isn’t just food-it’s a packaged experience priced by circumstance, not sentiment.

Reimagining the Consumer’s Role

Captive consumption reveals how modern commerce turns convenience into dependency. The consumer’s loss of exit power-not lack of awareness-fuels this imbalance. As airports morph into shopping malls and hospitals into hospitality complexes, the free market shrinks into curated capitalism.

Recent shifts, however, are promising. AERA’s Fair Price Shop initiative, NPPA’s digital oversight of pharmacy pricing, and scattered consumer court interventions hint that reform may already be on the runway. What India needs is convergence-a coherent philosophy that restores consumer sovereignty within confined commercial spheres.

Consumer rights cannot stop at the security gate or hospital entrance. Competition cannot be temporarily suspended for decorum or profit. Regulation must recognize captivity not as an anomaly but as a predictable feature of advanced consumer economies-and legislate for it accordingly.

Practical Way Forward

Legal Recognition: The Competition Act could be amended to include “captive sub-markets” as a specific analytical category.

Price Benchmarking: AERA and NPPA could integrate comparative price dashboards showing street-to-premise deviations.

Consumer Empowerment: Transparent signage could be mandated for all in-premise essential commodities.

Cross-Sector Integration: A joint monitoring cell can be constituted with quasi-adjudicatory powers for captive environments.

Public Awareness: Consumer associations can be encouraged to test and publish regular parity audits, much like energy tariff comparisons. The ultimate goal is subtle but powerful-to evolve from a commercial culture of “because we can charge more” to one of “we charge what is fair”.

Airports, multiplexes, and hospitals will always command a degree of captivity. But captivity need not mean exploitation. Through clear legal recognition, transparent pricing, and integrated oversight, India can balance entrepreneurial autonomy with consumer dignity. A competitive market loses its moral legitimacy when choice becomes choreography. Fairness, not just freedom, must define India’s next phase of consumer capitalism.

(This is an opinion piece, and views expressed are those of the author only)

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