Icasa seeks inquiry into SABC news deal with MultiChoice

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MultiChoice, a subsidiary of Naspers, and the SABC may face an investigation by the Competition Commission over an agreement that led to the 24-hour SABC news channel being broadcast on the DStv pay-TV platform.

The complainant is the Independent Communications Authority of SA (Icasa), which said yesterday that the broadcasters had been unco-operative when it asked them for a copy of the agreement for its initial probe into the arrangement.

It requested the commission check for the possibility that the companies had engaged in a restrictive horizontal practice, which relates to market collusion that is in violation of section 4 of the Competition Act.

A spokeswoman for the commission could not confirm the request because a formal complaint had not been received. But Icasa spokesman Paseka Maleka said the request had been sent on Friday.

The multimillion-rand deal was struck in July last year.

“News reports at the time indicated that the agreement also contained an obligation relating to the set-top box control, in which the SABC is alleged to have agreed that it will transmit its free-to-air channels without encryption,” Icasa said in a statement.

The authority added that, “in the context of the ongoing public dispute between e.tv and MultiChoice over whether free-to-air television services should utilise set-top box control, the question arises as to whether the agreement between the SABC and MultiChoice, as it affects the issue of set-top box control, may constitute a form of restrictive horizontal practice in the television market.”

MultiChoice has claimed that the SABC was contractually obligated to transmit its free-to-air channels without encryption as part of a vertical relationship between the parties and not one that was restrictive in the marketplace.

Icasa claimed the broadcasters did not provide a copy of the agreement as it had requested. This made it difficult to verify MultiChoice’s claim.

Restrictive horizontal practices involve collusion and certain competitor agreements and practices, while restrictive vertical practices involve certain customer or supplier arrangements.

MultiChoice and the public broadcaster are opposed to a national policy stipulating that about 5 million government-subsidised set-top boxes, which will be distributed to poor households to allow analogue television sets to play digital signals, must include the conditional access technology.

Broadcasters who choose to activate the technology must pay R20 per box to the state. The use of conditional access is supported by e.tv, but yesterday spokesman Vasili Vass said e.tv was not willing to comment at this stage and that it had not complained to the regulator.

MultiChoice meanwhile dismissed Icasa’s complaint as baseless. “Such an arrangement is pro competitive,” it said, adding that it was not legally obligated to give the agreement to Icasa. “In fact, Icasa is required, in terms of the Electronic Communications Act, to refrain from undue interference in the commercial activities of licensees.”

Maleka said the Icasa Act empowered Icasa to request information from licensees. – Additional reporting by Sapa


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