MultiChoice is currently appealing a ruling from South Africa’s Competition Commission, which stated that its 2013 agreement with the South African Broadcasting Corporation (SABC) constituted an unreported merger. The deal, which centered around the distribution of television content between the two companies, has sparked controversy due to its involvement in the ongoing digital terrestrial television (DTT) migration and its clauses that allegedly influenced SABC’s stance on encryption.
The Competition Commission found that the agreement, particularly its encryption clause, effectively restricted competition by protecting MultiChoice’s dominant position in the pay-TV market. The SABC had previously alternated its position on encryption, but in the agreement, it committed to not encrypt its free-to-air channels on the DTT platform, thus preventing new competitors from entering the market. This influence over the SABC’s policy constituted a merger, according to the Competition Act, which requires such mergers to be notified and approved by the competition authorities before implementation.
MultiChoice insists that the 2013 agreement was a typical business arrangement and that it should not be categorised as a merger. They argue that no anti-competitive intent was involved, and that the deal was in line with standard content-sharing practices. However, the Competition Commission has recommended that the Competition Tribunal treat the agreement as a merger and seek regulatory approval, further proposing potential proceedings against both MultiChoice and the SABC for failing to adhere to the notification requirements.
The ongoing appeal highlights tensions between corporate interests and regulatory oversight in the South African broadcasting sector. The outcome could have significant implications for the future of digital migration, competition laws, and the relationship between public broadcasters and private media giants.
This case has been under scrutiny for several years, with earlier efforts to challenge the deal dismissed due to insufficient evidence. However, new investigations have provided fresh insights that suggest the agreement warranted closer examination under competition law. As the case develops, it will continue to be a focal point for both industry watchers and regulators.
