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SABC-MultiChoice deal challenged at tribunal

2 Oct 2015

A consortium comprising media group Caxton, lobby group Save Our SABC Coalition (SOS) and Media Monitoring Africa argued before the Competition Tribunal on Wednesday, 30 September, that MultiChoice and the SABC must be compelled to classify their controversial content deal as a merger.

SABC-MultiChoice deal challenged at tribunal

Three years ago, the SABC and MultiChoice signed a five-year, R533m deal giving the pay-TV provider the right to air two of the public broadcaster's channels.

The channels - a 24-hour news channel and an entertainment channel showing old archived programmes - are already on DStv.

As part of the agreement, the SABC decided not to allow any of its channels to be encrypted during the five-year term. The SABC initially wanted encryption on the settop boxes that will be used to convert analogue TV signals to digital. However, it has since changed its position. The government has also decided against encryption in the state-subsidised set-top boxes.

The consortium believes the agreement between MultiChoice and the SABC constitutes a merger as it gave the pay-TV group control over the SABC's broadcast policy and its archived programmes. According to Caxton, this change in control together with the value of the agreement means the deal should have been filed as a merger and the Competition Commission should have been given the opportunity to assess the competition effects of the agreement.

But MultiChoice denied this, saying it was a business deal in which it was paying for the SABC content, which it described as a "wholesale content provider". The company argued that the parties entered into a "vertical contract".

The consortium also argued that the deal removed the SABC as a competitor and gave MultiChoice an advantage over competitors like StarSat and e.tv.

SOS said earlier this year the SABC archives were public assets.

MultiChoice and the SABC argued that the tribunal did not have jurisdiction over the matter.

Source: Business Day

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