The Competition Tribunal has dismissed MultiChoice’s exception application regarding an alleged notifiable merger between the broadcaster and the South African Broadcasting Corporation (SABC).<\/p>\n\n\n\n
“We are not satisfied that no cause of action has been made out that the agreement gave MultiChoice the power to influence the policy of SABC, which, if established, would constitute a merger in terms section 12(2)(g) of the Act,” the Tribunal said.<\/p>\n\n\n\n
“The central issue raises complex issues of both fact and law and potentially affects competition in the relevant markets and millions of South African consumers.”<\/p>\n\n\n\n
This follows a complaint against MultiChoice and the SABC, alleging that the two completed a Commercial and Master Channel Distribution agreement in 2013 and failed to notify the Competition Commission.<\/p>\n\n\n\n
The agreement allowed MutliChoice to carry the SABC’s unencrypted free-to-air channels on its DStv and GoTV subscription platforms in exchange for payment.<\/p>\n\n\n\n
The agreement also included a clause allowing MultiChoice to terminate or suspend the deal and claim a refund if SABC encrypts its free-to-air channels.<\/p>\n\n\n\n
This was at the height of MultiChoice’s battle with E-tv owner eMedia over whether government-subsidised digital terrestrial television (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 Competition Commission, the agreement enabled MultiChoice to influence the strategic direction of the SABC, making it a notifiable merger.<\/p>\n\n\n\n