MultiChoice appeals Competition Commission ruling
The Competition Commission has found that a 2013 deal between MultiChoice and the SABC was a notifiable merger and that both broadcasters had contravened the Competition Act.
MultiChoice has filed an exception application with the Competition Tribunal to appeal the finding.
The deal in question was a DStv channel carriage agreement with a termination clause that would trigger if the SABC broadcasted its channels over an encrypted digital terrestrial television (DTT) platform.
This was at the height of MultiChoice’s battle with E-tv owner eMedia over whether government-subsidised DTT set-top boxes (STBs) should include encryption capabilities.
In essence, the fight was over whether MultiChoice’s rivals, chiefly eMedia, should be given a government-subsidised entry into pay-TV.
MultiChoice argued that the additional encryption technology would needlessly increase the cost of the decoder-like STBs.
It also highlighted that the STBs were intended to be a temporary, intermediate measure for people whose older TVs could not receive digital TV signals.
eMedia countered that without encryption, there was a risk that government-subsidised STBs for indigent households would be scalped in overseas markets that use the same DTT standard as South Africa.
The fight was in court for years, and even though the government’s official position favoured encryption, the SABC signed an agreement that directly conflicted with policy at the time.
According to the Commission, the agreement enabled MultiChoice to influence the strategic direction of the SABC, making it a notifiable merger.
Caxton and CTP Publishers and Printers, the S.O.S Support Public Broadcasting Coalition, and Media Monitoring Africa brought the initial complaint against the agreement in 2015.
“Following proceedings in the Competition Tribunal, the Competition Appeal Court, and the Constitutional Court, the Commission has found that the channel distribution agreement did constitute a notifiable merger,” the Tribunal stated.
“The Commission filed a report with the Tribunal seeking confirmation that the agreement constitutes a merger.”
News of the agreement first emerged in September 2013, when the Sunday Times reported that MultiChoice had signed a secret deal with the SABC.
Under the terms of the deal, if the SABC broadcast its channels on an encrypted DTT television platform, it would risk MultiChoice cancelling the lucrative five-year, R553-million contract.
Due to the timing and circumstances of the deal, it was also brought before the Judicial Commission of Inquiry into State Capture.
In 2022, the chief justice Raymond Zondo cleared MultiChoice of the allegations.
“In conclusion on this topic, there is no evidence that MultiChoice had been involved in any improper, unlawful conduct, still less conduct which amounted to fraud or corruption,” the Zondo Commission’s report stated.
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