The Competition Commission has released a statement announcing that it will not prosecute MultiChoice and SuperSport after complaints regarding their “abuse of dominance”.
It decided not to prosecute because it saw “no reasonable prospects of success”.
Instead, it suggested that a regulatory intervention would prove more effective in dealing with MultiChoice and SuperSport’s dominance of the subscription TV market.
The Commission added that it foresees a potential market failure in the subscription TV sector due to factors including:
- The “highly concentrated nature” of the subscription TV market in South Africa.
- High barriers to entry.
- A lack of credible competition for premium sports rights.
- Excessively lengthy and exclusive contracts awarded to MultiChoice.
- A lack of alternative pay TV options.
The Commission also noted the current inquiry into subscription broadcasting services by ICASA, and said it would contribute to this inquiry where possible
ICASA recently suggested that all sports competitions of “national importance” should be available to free-to-air TV stations.
This prompted PSL chairman Irvin Khoza to state that without their TV deal with SuperSport, the PSL would lose 80% of its revenue and would be forced to shut down.