R180m consent settlement with MultiChoice outrageous - SACP

Party says agreement with Competition Tribunal hints at dangerous extent of systemic corporate state capture

R180-million “consent settlement” with MultiChoice outrageous:

28 May 2017  

The R180-million “consent settlement” filed on Thursday with the Competition Tribunal by South Africa’s pay-TV monopoly MultiChoice for price fixing and fixing trade conditions is outrageous. The agreement hints at the dangerous extent of systemic corporate state capture hardwired in a number of our state institutions, legislative and regulatory frameworks.

The amount is too small to warrant being described as a pinprick. It is nothing close to a slap on the wrist. If our economy is to transform, grow and prosper, the solution is not pinpricks. It is to legislatively enforce a breakup of the monopolies such as MultiChoice that more than 20 years after our April 1994 historic democratic breakthrough continue to dominate our economy.

MultiChoice is a subsidiary of Naspers, a private monopoly created during the colonial era and served as the mouthpiece of the Broederbond, the ideological vanguard of apartheid but refused to appear before the Truth and Reconciliation Commission for its complicity in the crime against humanity. Its monopoly practices, including its bloodsucking deal with the SABC, its opposition to encryption in South Africa’s analogue digital television broadcasting migration policy, coalesce on strengthening its dominance and weakening free-to-air television broadcasting, and have gone too far.

The R180-million “consent settlement” with MultiChoice can best be described as a token punishment after the Competition Commission, the investigative arm allowed the monopoly to be involved in determining the extent and form of the amount. MultiChoice’s advertising income is nearly R17-billion a year, and accounts for just under half of MultiChoice’s staggering annual turnover of R35-billion. The R180-million represents just 0.5 percent of MultiChoice’s annual income. MultiChoice is big enough to force its will on the industry and, as the Competition Commission itself found, the monopoly did so through its advertising sales company, DStv Media Sales.

That is bad enough.

But this is no ordinary case of price fixing: MultiChoice has a monopoly in South Africa’s pay-TV sector and the dominant position in the entire TV sector while Naspers’ other subsidiary, Media24 dominates the newspaper and magazine sector.

MultiChoice has a reputation, as do most monopolies, for throwing its weight around and crushing opposition ruthlessly.  Any anti-monopoly and anti-dominance transgression should be recognised for what it is – an attempt by a monopoly to extract even more from our country than it already has. And the state and its judicial structures should respond in a way that makes them think twice about repeat offending. Not with a pinprick.

It is almost certainly no coincidence that the Competition Tribunal was also responsible for last year’s attempt to legalise the similarly outrageous MultiChoice-SABC agreement – the agreement that contributed to SABC’s current slide towards bankruptcy and gave DStv control of SABC policy on digital terrestrial television broadcasting set-top boxes, of SABC news policy, and of the public broadcaster’s content archive.

This attempt to legalise the MultiChoice deal took the form of a judgment delivered by Competition Tribunal chair Norman Manoim, to the effect that the agreement was not “anti-competitive”. Fortunately Manoim’s judgment was decisively overturned a few months later by Competition Appeals Court Chair Judge Dennis Davis, who delivered a savage rebuke of Manoim’s findings.

The SACP will intensify its struggle for the de-monopolisation of the media and communications industry, and calls on all South Africans, the workers and poor in particular as they are the worst affected, to support this struggle in defence of our democracy.

Statement issued by the SACP, 28 May 2017