MultiChoice and Altech referred to Competition Tribunal for prosecution

The Competition Commission has referred a complaint against MultiChoice and Altech UEC to the Competition Tribunal for prosecution, alleging the two companies engaged in unlawful market division conduct.

The Commission claims MultiChoice and Altech reached an agreement in 2014 whereby Altech would not compete in the pay-TV market where MultiChoice operates so long as it could continue to supply set-top boxes (or decoders) to it. This is prohibited under the Competition Act as a form of collusion between potential competitors.

MultiChoice is the dominant pay-TV provider in SA. Altech is a manufacturer of set-top boxes used to operate subscription-based or pay television services and a key supplier to MultiChoice.

The Commission says the agreement between MultiChoice and Altech to divide the market constitutes division of markets by allocating suppliers or specific type of goods or services.

The CompCom is asking the Tribunal for an order declaring MultiChoice and Altech in contravention of the Competition Act, making them liable for an administrative penalty of up to 10% of their respective annual turnovers.

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This is not the first time MultiChoice has come under CompCom scrutiny over claims it was abusing its market dominance by refusing competitors’ access to certain sports channels. The pay-TV provider was also accused to raising market barriers to entry and locking content suppliers into overly long and exclusive contracts.

The CompCom ultimately decided not to refer these complaints to the Tribunal but to allow the Independent Communications Authority of South Africa (Icasa) to handle the matter, citing the low prospects of success in pursuing the case.

The decision now to refer both companies to the Tribunal arises from the claim that the master supply and support agreement between MutiChoice and Altech constitutes a horizontal restrictive practice in that would-be competitors divided up the market to avoid competing.

Altech UEC was sold by parent company Altron to Chinese-owned Skyblu Technologies in 2019 after the Competition Commission found the merged company, despite having a large market share, would face competition from other suppliers.

Though the original complaint dates back to 2014, competition authorities can pursue cases long after the event if they believe the evidence supports it. The CompCom has engaged with Icasa on the issue of the pay-TV market, though this does not preclude prosecuting contraventions of the law.

Moneyweb reached out to MultiChoice for comment but did not receive a reply at the time of publication.

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