Africa-Press – South-Africa. MultiChoice has been accused of “exclusionary conduct” and abuse of dominance by e.tv owner eMedia, because it discontinued the broadcast of four of its channels from the DStv platform after an agreement between the parties lapsed.
In a matter before the Competition Competition, eMedia seeks an interim relief order stopping the pay-TV operator from dropping its channels pending the conclusion of the case.
The case is centred on a 2017 broadcast agreement entered into by the parties, where DStv would broadcast its channels, eExtra; eMovies; eMovies Extra and eToonz. MultiChoice ceased to broadcast the channels after the contract expired on 31 March 2022.
However, DStv continues to carry eMedia’s 24-hour news channel, eNCA, and the daily Afrikaans news bulletin eNuus on kykNET.
According to eMedia, MultiChoice’s refusal to negotiate a new contract has no “rational justification” and removing the entertainment channels would harm its advertising income, market access and stunt its ability to invest in content across its platforms.
“MultiChoice’s foreclosure decision is motivated by anti-competitive objectives … a desire to exclude some of the most popular immediate entertainment channels from the DStv platform and thereby undermine eMedia’s ability to broadcast and produce rival content in competition with DStv’s own content channels,” eMedia said in its submission to the Commission.
MultiChoice states that there were legitimate commercial reasons for its decision not to renew the eChannels.
‘Bullying’
There had been several engagements between the companies prior to the end of March termination date, and eMedia CEO, Khalik Sherrif, in a letter on 13 January 2022, stated that eMedia viewed MultiChoice’s refusal to negotiate the contract of the foreclosed channels as an anti-competitive attempt to stunt the broadcaster’s market power and amounted to “bullying”.
At the heart of the arguments are potential financial losses due to the removal of the channels from the DStv platform.
eMedia’s legal counsel, Advocate Tembeka Ngcukaitobi, argued that the company derives “substantial advertising revenues from its relationship with MultiChoice” and is building the OpenView platform which is currently not an effective competitor with DStv.
Ngcukaitobi further argued that MultiChoice’s refusal to broadcast eMedia’s entertainment channels is aimed at “preventing eMedia from competing effectively as a channel provider”.
“Simply put, it is leveraging its dominance in the pay-tv market to prevent effective competition with rival channel providers such as eMedia, with the intention of increasing its share of television advertising spend on its own channels, with the ultimate objective of undermining eMedia as a competitor,” said Ngcukaitobi.
MultiChoice is of the view that eMedia failed to provide evidence to support its loss of income claim, and that even if they were to lose advertising revenue as a result of no longer being carried on DStv, there is no evidence that MultiChoice would capture all or even a significant proportion of the advertising revenue as claimed by eMedia.
The free-to-air broadcaster further argues that removing eMedia from the lucrative DStv platform, which offers access to a population group with higher LSM, will not only harm its business, but it will also ensure that advertisers have fewer alternatives to reach this target market.
The company wants the Competition Commission to grant it a six months interim relief order pending the final determination of its complaint. MultiChoice will continue its representations on Tuesday.
For More News And Analysis About South-Africa Follow Africa-Press
