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.<\/p>\n\n\n\n
MultiChoice has filed an exception application with the Competition Tribunal to appeal the finding.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
In essence, the fight was over whether MultiChoice’s rivals, chiefly eMedia, should be given a government-subsidised entry into pay-TV.<\/p>\n\n\n\n
MultiChoice argued that the additional encryption technology would needlessly increase the cost of the decoder-like STBs.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
According to the Commission, the agreement enabled MultiChoice to influence the strategic direction of the SABC, making it a notifiable merger.<\/p>\n\n\n\n
Caxton and CTP Publishers and Printers, the S.O.S Support Public Broadcasting Coalition, and Media Monitoring Africa brought the initial complaint<\/a> against the agreement in 2015. “The Commission filed a report with the Tribunal seeking confirmation that the agreement constitutes a merger.”<\/p>\n\n\n\n News of the agreement first emerged in September 2013, when the Sunday Times reported that\u00a0MultiChoice had signed a secret deal with the SABC<\/a>.<\/p>\n\n\n\n Under the terms of the deal, if the SABC broadcast its channels on an encrypted DTT television platform, it would risk MultiChoice cancelling the\u00a0lucrative five-year, R553-million contract<\/a>.<\/p>\n\n\n\n Due to the timing and circumstances of the deal, it was also brought before the Judicial Commission of Inquiry into State Capture.<\/p>\n\n\n\n
“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.<\/p>\n\n\n\n