Cineworld is facing the sale of cinemas in three areas after being told its takeover of the Picturehouse chain could lead to higher prices for film fans.
Highlighting its concern about the impact on consumers in Aberdeen, Bury St Edmunds and Cambridge, the Competition Commission said it may order the group to sell cinemas to a rival business in these areas.
Cineworld operates 79 cinemas in mainly out-of-town locations, while Picturehouse's 21 outlets tend to be smaller locations in town and city centres.
Cineworld, which acquired the art house chain for #47 million in December, said it was disappointed with the Commission's provisional findings and added that it would continue to lobby the watchdog ahead of its final report in October.
Chief executive Stephen Wiener said Cineworld and Picturehouse were "two fundamentally different businesses" that could operate in the same area.
He added that the company was committed to continuing its expansion and investment in the two chains.
Commission deputy chairman Alasdair Smith said that the two chains faced little competition in the three areas where they are in close proximity.
He added: "We found that when setting the price of tickets, exhibitors take account of the prices of competing cinemas operating in their local area.
"We will now look at ways we can restore competition and protect customers' interests."
More top news
A sunny but chilly start, cloud will build later with the odd shower.
Muslims in Bedfordshire are apparently being targeted by a group which aims to stop them voting- claiming the process is "anti- islamic."
After months of gruelling training, amateur runners can now bask in the glory of completing the London Marathon.