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MultiChoice Challenges Competition Commission Over SABC Deal Legality

Published November 26, 2024
2 months ago

In a significant development in South African broadcasting and competition law, MultiChoice has challenged the Competition Commission's decision regarding its 2013 deal with the South African Broadcasting Corporation (SABC). The Commission declared the agreement a notifiable merger, suggesting it breached competition regulations, prompting MultiChoice to file an exception application with the Competition Tribunal.





The heart of this controversy lies in the agreement between MultiChoice and SABC, involving a channel carriage arrangement where SABC agreed not to broadcast its channels on an encrypted digital terrestrial television (DTT) platform. This decision was pivotal during a period of intense debate about whether government-subsidized DTT set-top boxes (STBs) should include encryption capabilities, a feature MultiChoice opposed citing increased costs and temporary necessity.


eMedia Holdings, which operates E-tv and relies on free-to-air broadcasting, supported encryption to protect the subsidized STBs from being sold in international markets using the same DTT standard, potentially harming vulnerable South African households. This issue sparked a prolonged legal and policy battle involving various stakeholders, including government entities and broadcasting competitors.


According to the Competition Commission, the agreement between MultiChoice and SABC effectively allowed MultiChoice to significantly influence SABC’s strategic broadcasting decisions, thereby constituting a merger. This deal first came under scrutiny when the Sunday Times revealed the secret arrangement in 2013, indicating that SABC’s breach of the agreement could lead to MultiChoice terminating a lucrative five-year, R553-million contract.


The implications of this agreement extend beyond corporate interests to touch on freedom of press, competition in the broadcasting sector, and government policy regarding digital migration. The complaint against this merger was initially brought by Caxton and CTP Publishers and Printers, alongside the S.O.S Support Public Broadcasting Coalition and Media Monitoring Africa in 2015, followed by extensive legal scrutiny reaching as high as the Constitutional Court.


Despite the Competition Commission’s stance and the Tribunal’s confirmation of this interpretation, MultiChoice maintains its innocence regarding any anti-competitive behavior. The broadcaster's resistance to encryption was further complicated by the Judicial Commission of Inquiry into State Capture, with Chief Justice Raymond Zondo concluding in 2022 that there was no evidence of improper or corrupt conduct by MultiChoice.


This ongoing legal battle not only underscores the complexities of South Africa's transition to digital broadcasting but also highlights the significant intersection of government policy, corporate power, and public interest broadcasting. As MultiChoice appeals the Competition Tribunal's findings, the outcome of this legal debacle will likely have profound effects on the country's media landscape and policy framework governing digital encryption and competition among broadcasters.


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