Competition Authority probes MultiChoice

Brian Benza
Staff Writer | Friday June 28, 2013 00:00

 

The investigation was launched following a complaint to the competition watchdog by a member of the public who argued that MultiChoice's  conduct could be restrictive to consumer choices and therefore tantamount to a violation of a section of the Competition Act regarding abuse of dominant position by a market player.MultiChoice, which owns DSTV and Super Sport, offers five pre-selected channel blocks to viewers in Botswana ranging from the most expensive premium bouquet of P535 with over 100 channels to the lowest P80 block, which has 35 channels.With MultiChoice being a monopoly in Botswana, sentiments are that the company's position of dominance in the market has led to a restriction of consumers' choice as subscribers are forced to take up pre-selected blocks of channels with no option for the customers to pick channels in their preferred bouquet.

'Competition Authority should assess whether MultiChoice is not offending Section 30 of the Act concerning abuse of dominant position, particularly on excessive pricing and selling us a block of channels which the consumers do not necessarily need, a behaviour so restrictive of consumer choice,' reads the customer's complaint lodged through the CA website.The company, which is owned by the JSE-listed Naspers, also increases its prices annually by an average of 10 percent, a subject the complaint feels is unfair to the consumer. 'I think MultiChoice is directly or indirectly imposing unfair purchase or selling price on us. Their price increases every year are so unjustifiable and they are refusing to split their channels so that consumers can purchase the content they need.

There is possibility of price exploitation and Competition Authority must investigate,' added the consumer.Communications and advocacy director at the CA Gideon Nkala confirmed that the investigation of MultiChoice is underway but could not elaborate on the nature of the probe.MultiChoice Botswana general manager Billy Sekgororoane however declined to comment on the matter but referred all enquiries to the CA.According to the Competition regulations, the CA may consider an enterprise to be in a dominant position if it supplies at least 25 percent of the goods or services in the market. Notwithstanding the thresholds, the CA can then launch an investigation if it deems the enterprise in dominant position possesses such economic strength in a market so much that the company can adjust prices or output without effective constraint from competitors or potential competitors. The CA can also initiate a probe if the conduct of an enterprises deemed to be in a dominant position has or is likely to cause serious or irreparable harm to the market or consumer.

MultiChoice has maintained a stranglehold of the Africa pay-TV segment for the last 20 years, amassing a following of about six million subscribers in several Sub-Saharan Africa countries and adjacent Indian Ocean islands.According to the Competition Act, in determining whether an abuse of dominant position has occurred, the authority may have regard to whether the agreement or conduct in question maintains or promotes exports from Botswana or employment in Botswana. The authority can also take into regard if the conduct provides social benefits, which outweigh the effects on competition, or if it enhances the competitiveness of small and medium-sized enterprises.

In South Africa, MultiChoice is currently the subject of two Competition Commission complaints over its Super Sport arm's monopoly on key sports rights. According to City Press, two complaints have been lodged at the commission over Super Sport's monopoly on key sports rights such as the Premier Soccer League and the English Premier League. One complaint was lodged by competitor, On Digital Media (ODM), which owns TopTV, while the other came from a member of the public, the paper reported.