The news

• The Competition Tribunal has dismissed MultiChoice’s attempt to halt a merger investigation with the South African Broadcasting Corporation (SABC), allowing the case to proceed.
• This development intensifies scrutiny on MultiChoice, which is concurrently undergoing a $2.9 billion acquisition by French media company Canal+.
• Regulatory bodies, including the Independent Communications Authority of South Africa (ICASA), are closely examining the implications of MultiChoice’s market dominance and foreign ownership structures.

Tribunal’s decision and its implications

The Competition Tribunal’s recent ruling has significant implications for South Africa’s broadcasting landscape. By allowing the investigation into the alleged merger between MultiChoice and SABC to proceed, the Tribunal acknowledges the potential for substantial influence by MultiChoice over SABC’s policies.

This influence, if proven, could constitute a merger under Section 12(2)(g) of the Competition Act, which addresses situations where one firm gains the ability to materially influence the policy of another.

The case centers around a 2013 agreement that critics argue may have compromised SABC’s editorial independence, particularly concerning the broadcasting of news content. The Tribunal emphasised the complexity of the issues at hand, noting that they involve intricate questions of fact and law with potential ramifications for competition and consumer welfare in South Africa.

Regulatory challenges amid Canal+ acquisition

This legal development occurs against the backdrop of Canal+’s proposed acquisition of MultiChoice.

The deal, valued at approximately $2.9 billion, aims to expand Canal+’s footprint in the African market. However, it faces regulatory hurdles, notably South Africa’s Electronic Communications Act, which limits foreign ownership in local broadcasters to 20% of voting rights.

To navigate these restrictions, Canal+ and MultiChoice have proposed a restructuring plan that involves creating a separate entity, LicenceCo, to hold the South African broadcasting license.

This entity would be majority-owned by historically disadvantaged South Africans, ensuring compliance with local ownership laws while allowing Canal+ to maintain a significant economic interest.

ICASA’s role and concerns

The Independent Communications Authority of South Africa (ICASA) plays a pivotal role in overseeing the broadcasting sector. In recent times, ICASA has expressed concerns about MultiChoice’s market dominance, particularly in the context of satellite broadcasting and content distribution.

MultiChoice has, in turn, challenged some of ICASA’s regulatory proposals, arguing that they could adversely affect existing satellite operations and investments.

The ongoing legal and regulatory scrutiny underscores the delicate balance between fostering a competitive broadcasting environment and accommodating significant industry players like MultiChoice. As the Canal+ acquisition progresses, the outcomes of these investigations and regulatory reviews will be critical in shaping the future of South Africa’s media landscape.