Business Day reports (MultiChoice calls for Netflix to be regulated, July 12) that MultiChoice is blaming its demise on its main competitor, the online streaming service Netflix, and that for MultiChoice to be saved, Netflix too must be regulated.
Cronyism happens when existing, usually large, firms go to the government to have their competitors regulated out of the market. The existing firms usually have the resources to comply with regulations, but know their smaller competitors do not. These firms can no longer compete on quality of service or affordability, and thus use the force of the state to get what they want. In a free market, firms come and go. No firm is too big to fail: if it no longer pleases its consumers and they go elsewhere, the firm goes under. Its continued existence depends entirely on the will of the people, making the free market the most democratic forum imaginable. Don’t punish Netflix for giving the sovereign consumers exactly what they want.
When regulations are introduced, the market is perverted and consumers undermined.
MultiChoice should not make itself guilty of cronyism. It is unethical and it also makes no sense. Rather than asking for Netflix to be regulated, MultiChoice should be demanding that it (MultiChoice) be deregulated.
Only in a free market can competition truly be fair. The government needs to get out of the way, and big business shouldn’t become accomplices in the perversion of our economic system.
Martin van Staden
Free Market Foundation