SA: Investigation into SABC/Multichoice deal

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South Africa’s Constitutional Court has set aside a 2017 Competition Appeal Court ruling and said the Competition Commission is entitled to perform an investigation into a channel licensing agreement between the South African Broadcasting Corporation (SABC), and pay-TV operator MultiChoice.

“MultiChoice agreed in terms of the agreement to pay the SABC fees of more than R500m [€30.53m] over a period of five years, in exchange for which the SABC undertook that the entertainment channel, to be broadcast on the MultiChoice platform, would consist mainly of content from the SABC’s substantial archive of programmes (SABC archive),” said the ruling.

The agreement had been the subject of a hearing at the Tribunal and three separate hearings in the Competition Appeal Court. At issue was whether the agreement amounted to a notifiable merger as defined in the Competition Act.

The appeal had been brought by S.O.S Support Broadcasting Coalition, Trustees for the time being of the Media Monitoring Project Benefit Trust and Caxton and CTP Publishers and Printers after the Competition Appeal court ruled that Commission held that its June 2016 order “did not and cannot be read to give the [Commission] powers in terms of section 49A of the [Competition] Act”.

Caxton was concerned that it gave MultiChoice an exclusive licence to use certain SABC content to broadcast on an entertainment channel on the DStv ‘Encore’ Bouquet, as well as agreeing to broadcast its SABC 1, 2 and 3 channels, and any future channels, on an unencrypted basis and without any conditional access system.

In the ruling, Judge Fayeeza Kathree-Setiloane wrote that although the agreement between MultiChoice and the SABC ended in July 2018, it does not diminish the necessity for the Commission to investigate whether the agreement constitutes a notifiable merger.

“We were informed that the agreement may be renewed or a similar one may be concluded between the SABC and MultiChoice, having regard especially to the ongoing debates on encryption regarding South Africa’s migration to DTT (digital terrestrial television).

“It is essential, for this reason, that clarity be obtained from the competition authorities on whether the agreement constitutes a notifiable merger as defined in the Competition Act. Accordingly, the interests of justice require that leave to appeal be granted.”

The Competition Commission was directed to file its report to the Competition Tribunal within 30 days of the September 28th order being given.

“The first (SABC) and second (Multichoice) respondents are ordered jointly and severally to pay the costs of the application, including the costs of two counsel”, the judgment read.

The SABC said that it noted the judgment and committed to cooperate with the Competition Commission in its investigation.


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