MultiChoice, a major player in the South African pay-TV industry, is currently challenging the Competition Commission’s ruling regarding its 2013 agreement with the South African Broadcasting Corporation (SABC). The Commission determined that the deal constituted an unreported merger under the Competition Act, sparking a legal battle that could have significant implications for media business practices in the country.
The agreement in question involved the inclusion of SABC channels on MultiChoice’s DStv platform, with a controversial termination clause prohibiting the SABC from broadcasting its channels over an encrypted digital terrestrial television (DTT) platform. This clause became a point of contention between MultiChoice and eMedia, the owner of free-to-air station E-tv.
At the core of the dispute is the debate over whether encryption technology should be incorporated into South Africa’s DTT migration, particularly in government-subsidized set-top boxes (STBs). MultiChoice has been a vocal opponent of encryption, arguing that it would unnecessarily raise costs for viewers. The company has maintained that STBs were intended as a temporary solution for older television models to access digital signals.
On the other side, eMedia and encryption advocates believe that encryption is crucial for protecting content and promoting fair competition in the pay-TV industry.
The Competition Commission’s ruling concluded that the 2013 agreement effectively gave MultiChoice significant influence over the SABC’s broadcasting decisions, akin to a merger. By not notifying the Commission, both MultiChoice and the SABC are accused of violating the Competition Act. MultiChoice, however, contends that the agreement was a standard commercial arrangement and not a merger. The company has appealed the ruling to the Competition Tribunal in an effort to overturn it.
The outcome of this legal battle will have far-reaching implications for the media industry in South Africa, particularly concerning competition and regulatory oversight. As the case unfolds, stakeholders will be closely watching to see how the Tribunal ultimately rules on this contentious issue.
