MultiChoice′s R500m broadcasting agreement with SABC will be probed
Competition commissioner Tembinkosi Bonakele says top court’s ruling clears up the ambiguity about the Competition Commission′s power to investigate
Details of the R500m broadcasting agreement between video entertainment group MultiChoice and national broadcaster SABC will be investigated and the results made public by the Competition Commission following a Constitutional Court ruling on Friday.
The court ruled that the Competition Appeal Court could not limit the powers of an investigation by the commission.
The five-year agreement, which gave MultiChoice, Africa’s largest pay television operator, the right to broadcast SABC’s 24-hour news channel and an entertainment channel, sparked widespread criticism in November 2017, when parliament received information that appeared to confirm that as part of the deal SABC undertook to back MultiChoice’s position on encryption of set-top boxes.
MultiChoice, which is an 80% controlled subsidiary of global internet group Naspers, has just launched plans for a separate listing on the JSE.
Competition commissioner Tembinkosi Bonakele welcomed the Court’s ruling and said the commission would work hard to complete the investigation within the 30-working-day deadline set down by the court.
“We’re very pleased the court has confirmed this important principle and cleared up the ambiguity about our power to investigate whether a merger had been implemented without notification,” Bonakele told Business Day on Sunday.
He said the results of the investigation would be filed with the Competition Tribunal. It is then available to the public unless one of the parties claims confidentiality. A leading competition lawyer told Business Day that a confidentiality claim would be difficult to justify as the agreement has expired.
The court’s decision is the outcome of a legal challenge launched by media group Caxton and the Save our SABC (SOS) coalition of civil society organisations in 2015. Caxton and SOS argued that the agreement was a notifiable merger and that MultiChoice and SABC have contravened the Competition Act by not notifying the commission.
In 2016 the Competition Appeal Court gave the go-ahead for a limited investigation by the commission. Caxton and SOS appealed against that decision to the Constitutional Court and on Friday the court ruled the scope of the investigation could not be restricted.
The SABC, which had previously claimed the bulk of the documents sought by the commission did not exist, could not be traced or were not relevant, said on Friday it was committed to cooperating with the commission in its investigation.
MultiChoice said on Sunday it welcomed the top court’s clarification in its judgment regarding the Competition Commission’s powers in its review of the 2013 channel agreement between MultiChoice and SABC.
″MultiChoice will continue to cooperate fully with the commission and remains confident that the agreement does not constitute a merger. As we’ve stated on many occasions, the agreement was a standard supply contract similar to the ones we have with other channel suppliers locally and internationally,″ the company said.