South Africa’s competition regulator has ruled a 2013 distribution deal between pay-TV operator Multichoice and public broadcaster SABC should have been registered as a merger under the country’s Competition Act.
Under the agreement, Multichoice had agreed to pay SABC R500 million in return for the broadcaster agreeing not to encrypt any of its channels as a result of its move to digital terrestrial television.
In addition, the decision is said to have led to SABC dropping proposals for control of the country’s set-top box inventory.
The two now face possible sanctions if they do not notify the authority’s retrospectively.
The new ruling is contrary to a decision made in 2016 by South Africa’s Competition Tribunal
“The SABC Board is reviewing the Commission’s recommendations in relation to the encryption part of the 2013 agreement and will respond appropriately in due course,” the public broadcaster said in a statement.
In a statement, Joe Heshu, Group Executive Corporate Affairs, said. “We have noted the recommendation of the Competition Commission to the Competition Tribunal, which will now hold a hearing into the matter. Our view remains firmly that the 2013 agreement between MultiChoice and the SABC was not a merger but a standard channel distribution agreement similar to the ones we have with numerous other channel suppliers.
“Both the Tribunal and the Competition Appeals Court have previously ruled that the channel distribution agreement did not constitute a merger.”
The company said it would make further representations to the Tribunal.
