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MultiChoice Fights Competition Commission Ruling Over SABC Deal

November 25, 2024

MultiChoice fights Competition Commission ruling over SABC deal which amounted to an unreported merger.

The case revolves around the controversial encryption clause in digital terrestrial television (DTT) migration. MultiChoice insists the agreement was a standard business deal, while opponents claim it stifled competition.

South African pay-TV giant MultiChoice has lodged an appeal against the Competition Commission’s recent ruling that its 2013 carriage agreement with the South African Broadcasting Corporation (SABC) constituted a notifiable merger under the Competition Act. The company has filed an exception application with the Competition Tribunal to contest the ruling, which could set a significant precedent for media business practices in the country.

The 2013 agreement involved the inclusion of SABC channels on MultiChoice’s DStv platform. The deal contained a controversial termination clause, stipulating that the SABC would not broadcast its channels over an encrypted digital terrestrial television (DTT) platform. The clause became a focal point of conflict between MultiChoice and eMedia, owner of free-to-air station E-tv.

At the heart of the matter is the broader issue of whether South Africa’s DTT migration should incorporate encryption technology in government-subsidized set-top boxes (STBs). MultiChoice has long opposed encryption, arguing that it would increase costs unnecessarily for viewers. The company has maintained that the STBs were meant to provide a temporary solution for older television models to access digital signals.

Conversely, eMedia and other advocates for encryption argue that the technology is critical for protecting content and leveling the playing field for competitors in the pay-TV industry.

Competition Commission’s ruling

The Commission’s findings assert that the 2013 agreement effectively gave MultiChoice significant influence over the SABC’s broadcasting decisions, a situation comparable to a merger. By failing to notify the Commission, MultiChoice and the SABC are alleged to have breached the Competition Act’s requirements.

MultiChoice disputes this characterisation, claiming the agreement was a standard commercial arrangement that did not warrant classification as a merger. In its appeal to the Tribunal, the company will seek to overturn the ruling.

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