MultiChoice will on Tuesday appear before the Competition Tribunal to appeal a Competition Commission finding that a controversial 2013 channel distribution deal with the SABC constituted a “notifiable merger”, meaning the two broadcasters contravened the Competition Act by not notifying the commission of the alleged merger.
“Following proceedings at the Competition Tribunal, the competition appeal court and the constitutional court, the commission has found that the channel distribution agreement did constitute a notifiable merger – that the agreement enabled MultiChoice to influence the strategic direction of the SABC,” the tribunal said in a statement on Monday. “The tribunal will now hear an exception application brought by MultiChoice.”
The applicants in the matter – media house Caxton, lobby group SOS Coalition and the Media Monitoring Project Benefit Trust – approached the Competition Commission in 2015.
The agreement in question gave MultiChoice the right to broadcast the SABC’s 24-hour news channel and SABC Encore, an entertainment channel, for a period of five years.
It emerged in 2015, however, that the SABC – as part of the deal – had agreed to back MultiChoice’s position on digital migration, which was that the set-top boxes used by households to receive the digital signal post-migration should not be encrypted.
eMedia, owner of e.tv and a competitor to MultiChoice in satellite television, in 2016 won a supreme court of appeal ruling forcing government to add encryption to the government-subsidised set-top boxes that would facilitate digital migration. eMedia argued that a lack of encryption would lead to the broadcast signals being easy to pirate, making it more difficult for free-to-air broadcasters to secure rights to high-quality content.
Influence
MultiChoice, on the other hand, argued that the real reason for eMedia’s insistence on encryption was eMedia could use the government-subsidised set-top boxes to launch a competing satellite pay-TV platform without having to invest in getting the boxes into people’s homes.
In a 2018 ruling, the Competition Commission found that the broadcasting agreement between MultiChoice and the SABC did not constitute a notifiable merger in and of itself, but that MultiChoice gaining the ability to influence the SABC’s policy on digital migration did.
Read: DTT has failed in South Africa – now scrap it, says eMedia
“The commission will call upon MultiChoice and the SABC to file the transaction in terms of 13A(1) of the [Competition] Act as a merger. If the parties fail to notify the transaction as a merger, the commission will exercise its rights in terms of the act to refer the matter as a contravention,” the commission said at the time.
According to Monday’s statement, MultiChoice wants a declaration by the tribunal that the facts presented by the commission and the applicants do not constitute a merger as defined by the Competition Act. MultiChoice is also seeking the dismissal of the application. – © 2024 NewsCentral Media
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