South Africa's Competition Commission refers MultiChoice, Altech to Tribunal over market division

Key facts

• The Competition Commission has referred a complaint against MultiChoice and Altech UEC to the Competition Tribunal for prosecution.
• The complaint, originally filed 12 years ago, alleges the two companies engaged in unlawful market division conduct.
• MultiChoice is the owner of DStv, a dominant pay-TV operator in South Africa.
• Altech UEC is a technology company that provides set-top boxes and other equipment.
• The referral marks a significant escalation in the long-running antitrust case.
• The Competition Tribunal will now hear the case and determine if the companies violated competition laws.

Regulator escalates 12-year-old complaint to tribunal

The Competition Commission has referred a long-standing complaint against MultiChoice and Altech UEC to the Competition Tribunal for prosecution, alleging the two companies engaged in unlawful market division conduct. The complaint, originally filed 12 years ago, accuses the DStv owner and the technology firm of colluding to carve up the market, potentially stifling competition. The referral marks a significant escalation in a case that has simmered for over a decade. The Commission's decision to move the matter to the Tribunal signals that it believes there is sufficient evidence to warrant a formal prosecution. The Tribunal, a quasi-judicial body, will now hear the case and determine whether the companies violated South Africa's competition laws.

MultiChoice and Altech face allegations of market collusion

At the heart of the complaint are allegations that MultiChoice and Altech UEC engaged in market division, a practice where competitors agree to split markets among themselves rather than compete. Such conduct is illegal under South Africa's Competition Act as it reduces consumer choice and can lead to higher prices. The Commission has not disclosed the specific details of the alleged market division, but the case is believed to involve the supply of set-top boxes and other digital television equipment. Altech UEC is a key supplier of such technology, while MultiChoice is the dominant pay-TV operator through its DStv brand. The two companies have had a long commercial relationship, which the Commission now argues may have crossed into anti-competitive territory.

Long-running case finally reaches prosecution stage

The complaint was first lodged 12 years ago, but the case has moved slowly through the regulatory process. The Commission's investigation has been protracted, involving extensive fact-finding and legal analysis. The referral to the Tribunal indicates that the Commission has concluded its investigation and believes it has a strong case. For MultiChoice, the referral comes at a difficult time. The company is already facing intense competition from streaming services like Netflix and Showmax, and has seen traditional TV viewership decline as Kenyans and other African consumers spend more time on streaming and social apps. In response, MultiChoice recently froze DStv prices and received a $106 million investment from Canal+ as part of a turnaround plan. The company has also been battling allegations of anti-competitive behavior related to its deal with Altech, which it has rejected.

Wider implications for South Africa's media and tech sectors

The case has broader implications for South Africa's media and technology landscape. Market division allegations, if proven, could result in significant fines and remedial actions against MultiChoice and Altech UEC. The Tribunal has the power to impose penalties of up to 10% of a company's annual turnover in South Africa for a first-time contravention of the Competition Act. Beyond the financial penalties, a finding of guilt could force changes to how MultiChoice and Altech UEC conduct their business. It could also open the door for private damages claims from competitors or consumers who believe they were harmed by the alleged collusion. The case is being closely watched by industry players and regulators across Africa, as it could set a precedent for how competition law is enforced in the region's rapidly evolving pay-TV and streaming markets.

What comes next: Tribunal hearings and potential outcomes

The Competition Tribunal will now schedule hearings to examine the evidence and hear arguments from both sides. The process could take months or even years, depending on the complexity of the case and any appeals. MultiChoice and Altech UEC have the right to defend themselves and present their own evidence. If the Tribunal finds the companies guilty, it can impose fines, order them to cease the anti-competitive conduct, and require them to take corrective measures. The companies could also appeal the Tribunal's decision to the Competition Appeal Court and ultimately to the Supreme Court of Appeal. The case is far from over, but the referral to the Tribunal marks a critical juncture in a saga that has been unfolding for more than a decade.

A test for competition enforcement in Africa's largest economy

The MultiChoice-Altech case is a test of South Africa's ability to enforce competition law in complex, technology-driven markets. The Commission has been increasingly active in recent years, taking on cases in sectors ranging from banking to healthcare. But the pay-TV and streaming market presents unique challenges, as it involves rapidly changing technology and consumer behavior. The outcome of this case will have ramifications beyond the two companies involved. It will signal to other market players how aggressively the Commission and Tribunal are willing to police anti-competitive conduct in the digital economy. For consumers, the case is a reminder that competition enforcement can play a crucial role in ensuring fair prices and choices in the entertainment sector.

The bottom line

• The Competition Commission has referred a 12-year-old complaint against MultiChoice and Altech UEC to the Competition Tribunal for prosecution over alleged market division.
• The case involves allegations that the two companies colluded to divide markets, potentially violating South Africa's Competition Act.
• MultiChoice, owner of DStv, is already facing competitive pressures from streaming services and has implemented a turnaround plan with a $106 million investment from Canal+.
• If found guilty, MultiChoice and Altech UEC could face fines of up to 10% of annual turnover and be required to change their business practices.
• The Tribunal hearings will be closely watched as a test of competition enforcement in Africa's largest economy and could set a precedent for the pay-TV and streaming sectors.