MultiChoice in hot water

MultiChoice and Altech UEC South Africa are in hot water with South Africa’s competition watchdogs for allegedly contravening the Competition Act.

The Competition Commission announced on Monday, 4 May, that it has referred the two companies to the Tribunal for prosecution.

MultiChoice owns and operates pay-TV provider DStv, while Altech manufactures set-top boxes used to operate subscription-based or pay-TV services.

MultiChoice sources its set-top boxes from Altech to provide its pay-TV services.

The Competition Commission has alleged that MultiChoice and Altech entered into an agreement to divide markets by allocating suppliers and specific types of goods or services.

This type of agreement would contravene section 4 of the Competition Act, which prohibits restrictive horizontal practices.

Specifically, the two companies are accused of contravening the subsection that prohibits dividing markets by allocating customers, suppliers, territories, or specific types of goods or services.

According to the Competition Commission, its investigation revealed that the two companies reached an agreement in 2014 for Altech not to enter into or compete in the pay-TV market where MultiChoice operates.

“This arrangement constitutes division of markets by allocating suppliers and /or specific type of goods or services,” the commission claimed.

“The commission seeks an order declaring that MultiChoice and Altech contravened section 4(1)(b)(ii) of the Act, and that they are liable for an administrative penalty of up to 10% of their respective annual turnover.”