Competition Tribunal backs MultiChoice’s move to cut eMedia channels

Competition authorities say eMedia, which is majority owned by Hosken Consolidated Investments (HCI), failed to show how MultiChoice’s decision to cut four channels from its platform would harm competition or deprive consumers of its services.

This failure ultimately led to the company losing a case launched earlier this year. 

Worth R2.15bn, eMedia owns television and radio broadcasting businesses that include eNCA, OpenView and Yfm, together with production studios.

In April, the group, which owns various e.tv channels, took MultiChoice to the Competition Tribunal — which has the final say on competition-related matters — after the DStv operator said it would carry fewer of its channels from April 1.

eMedia had sought an interim relief order stopping MultiChoice from dropping its channels pending the conclusion of the case. It argued that the move would hurt its advertising income and market access, and stunt its ability to invest in content.

On Monday the tribunal declared that eMedia had failed to prove that MultiChoice’s move would harm competition or that the move would disadvantage consumers since access to these channels is still possible on eMedia’s Open View platform. 

“The tribunal concluded that it is not reasonable and just to grant interim relief in favour of eMedia,” the competition body said, adding that “granting interim relief may unduly alter the state of competition in the market in favour of eMedia to the exclusion of other competitors in the market”.

Interim relief is meant to temporarily protect and maintain competition while the Competition Commission — which investigates, controls and evaluates restrictive business practices — is investigating a market’s structure. A full investigation may or may not confirm evidence of harm. 

The tribunal said the discontinuation was likely to harm eMedia’s bottom line, likely from a cut in advertising, as opposed to actual competition in the broadcast market. 

Advertising is eMedia’s biggest revenue earner, making up two-thirds, or R2.1bn, of total revenue for the year to March.

In its adjudication, the tribunal had to establish whether MultiChoice’s conduct was “an exclusionary act” as defined by the law. To do so, there must be a refusal to supply goods or services to a customer or competitor; the refusal to supply is in respect of scarce goods or services; and it is economically feasible to supply.

The tribunal said eMedia had not established that “basic satellite television services” were scarce. The e.tv owner had also not established that “MultiChoice’s behaviour could be said to be a refusal to supply a competitor access to the DStv platform since MultiChoice argues that it does not provide access to the technical platform services and is only obligated to carry the public broadcasting services channels”.

Earlier this year, eMedia and MultiChoice renewed a channel supply agreement in which DStv opted not to carry certain eMedia channels: eMovies, eMovies Extra, eExtra and eToonz.

DStv now broadcasts only eNCA (channel 403) and the daily Afrikaans news bulletin on kykNET (channel 144). Meanwhile e.tv, licensed under a separate agreement, continues to air on the DStv platform.

All e.tv channels continue to be broadcast and are available on OpenView, eMedia’s free-to-air satellite TV service platform. The OpenView service has more than 2.3-million active decoders and reported 35,000 new activations each month in the past financial year.

gavazam@businesslive.co.za