Nicola Mawson
In a legal quarrel that has been going on for more than six years, MultiChoice Group and the South African Broadcasting Corporation (SABC) were yesterday arguing before the Competition Tribunal that a July 2013 agreement to exclusive content deals did not amount to a merger as MultiChoice did not have control over the public broadcaster.
The deal, which the Competition Commission has stated should have been presented to it as a notified merger, is “of significant public interest” as it enabled the DStv owner to influence the SABC’s strategic direction.
Caxton Media Group, Media Monitoring Africa, and the SOS: Support Public Broadcasting Coalition, have also alleged the agreement constituted a merger.
Legal wrangling started in 2015 and has been through various courts and judicial bodies, including the Competition Tribunal, Competition Appeal Court, as well as the Constitutional Court.
In 2018, the Constitutional Court decided that the Commission could investigate the matter, effectively sending the entire deal back to the Commission. This antitrust body, following an investigation, then sought a report from the Tribunal seeking confirmation that the agreement constituted a merger.
In an exception application to this particular application by the Commission, which was heard yesterday, MultiChoice sought to have this request for a report confirming a merger dismissed.
MultiChoice and the SABC agreed that the satellite TV provider would pay the public broadcaster R500 million in exchange for the exclusive rights to the SABC’s entertainment channel, which would consist mainly of content from the SABC’s substantial archive of programs.
This was during the term of the SABC’s former controversial chief operating officer, Hlaudi Motsoeneng, whose appeal to the Constitutional Court to pay back to the public broadcaster the R11.5 million “success fee” for the deal, plus interest, was dismissed.
The agreement also included that the SABC would not encrypt any of its free-to-air channels in South Africa’s long-awaited and currently incomplete migration to digital terrestrial television.
SOS has argued that the deal resulted in SABC handing over power and control of its archives, which it called its “family jewels” to MultiChoice.
“The archives are more than simply a collection of old broadcast programmes and material. They are an invaluable public asset of a broadcaster that has unique footage of South Africa’s transition to a democracy, including unique footage of [former President Nelson] Mandela,” SOS said.
Senior Counsel Advocate Wim Trengove, arguing on behalf of MultiChoice, yesterday said that the deal did not constitute a merger as alleged.
“Caxton keeps on telling you that this is a merger here as if it is a free-wheeling picnic in which all of the evidence will be invited and put in a pot and we will then see what comes of it. But nothing can be further from the truth. This is not a merger here,” he argued.
Trengove also said that the matter could be a long and drawn-out process that could rather be answered through papers, which is in the public interest.
“I won't attempt to guess how long it will be, but it’ll be a very long trial because there are very many disputes between the parties,” he said.
In addition, Trengove said that MultiChoice did not exert any power over the SABC, especially regarding the set-top boxes encryption control mechanisms, which the Commission had alleged was changed following the deal between the two TV companies.
Trengove also said that MultiChoice had no control over the SABC “in a manner comparable to what a [majority] shareholder does”.
He added that the public broadcaster may make future decisions, over which MultiChoice has no control.
Senior Counsel Advocate Rafik Bhana, representing the SABC, said
“However influential the agreement might be, the question is not what the impact of the agreement was. The question is whether the agreement gave MultiChoice the power to prescribe or influence the SABC in its decisions… There was no such power,” Bhana said.
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