Multichoice (Pty) Ltd v Caxton and CTP Publishers and Printers and Others (OTH201Feb15/DSM081Aug22) [2025] ZACT 4 (10 April 2025)

Case Note

MultiChoice (Pty) Ltd v Caxton and CTP Publishers and Printers and Others
Competition Tribunal of South Africa, Case Nos. OTH201Feb15 / DSM081Aug22
Reasons for Decision and Order delivered 10 April 2025 (hearing 26 November 2024)

Reportability

This judgment is reportable because it clarifies the scope of section 12(2)(g) of the Competition Act 89 of 1998, particularly the concept of “material influence” in the context of non-equity arrangements between media entities.

Secondly, the Tribunal’s reasons furnish important procedural guidance on the use of exception applications in competition-law litigation, outlining when a matter should be decided on the papers and when the Tribunal’s inquisitorial powers must be invoked.

Finally, the decision is significant in the public-interest sense: it concerns the South African public broadcaster, encryption policy for free-to-air broadcasting, and the potential entrenchment of market power in the pay-TV sector. For these reasons the judgment contributes to the continuing development of South African merger-control jurisprudence and must therefore be reported.

Cases Cited

Caxton and CTP Publishers and Printers Limited; The Trustees for the Time Being of the Media Monitoring Project Benefit Trust; S.O.S Support Public Broadcasting Coalition v MultiChoice (Pty) Ltd; South African Broadcasting Corporation (SOC) Ltd; Competition Commission (OTH201Feb15) (Competition Tribunal, 11 February 2016)

Caxton and CTP Publishers and Printers Limited and Others v MultiChoice Proprietary Limited and Others (140/CAC/MAR16) [2016] ZACAC 2 (24 June 2016)

S.O.S Support Public Broadcasting Coalition v South African Broadcasting Corporation (SOC) Limited and Others [2017] ZACAC 2 (28 April 2017)

S.O.S Support Public Broadcasting Coalition and Others v South African Broadcasting Corporation (SOC) Limited and Others 2019 (1) SA 370 (CC)

Murray & Roberts Holdings Limited v Aton GmbH and Another [2018] 2 CPLR 519 (CAC)

Invensys PLC v Protea Automation Solutions (Pty) Ltd [2014] 2 CPLR 505 (CT)

Pretorius and Another v Transport Pension Fund and Others 2019 (2) SA 37 (CC)

Coolheat Cycle Agencies (Pty) Ltd v Competition Commission [2014] ZACT 40

Legislation Cited

Competition Act 89 of 1998 (as amended), especially sections 12(1), 12(2)(g), Chapters 5B and 6

Rules of Court Cited

Competition Tribunal Rules 15, 42 and 55(1)(b)

Uniform Rules of Court, Rule 23 (applied through Tribunal Rule 55)

HEADNOTE

Summary

The Tribunal dismissed an exception brought by MultiChoice (Pty) Ltd. MultiChoice sought a declarator that the Commercial and Master Channel Distribution Agreement it concluded with the South African Broadcasting Corporation (SOC) Limited (SABC) in 2013 did not constitute a notifiable merger under section 12(2)(g) of the Competition Act.

The Competition Commission and three public-interest applicants (Caxton, the Media Monitoring Project Benefit Trust, and the S.O.S Support Public Broadcasting Coalition) contended that MultiChoice obtained material influence over the SABC’s encryption policy through the Agreement, thereby acquiring “control”. The Commission’s investigation—ordered by the Competition Appeal Court (CAC) and endorsed by the Constitutional Court—supported that conclusion.

MultiChoice argued that, even if all alleged facts were accepted as true, they could never amount to an acquisition of control. The Tribunal rejected this view, held that material disputes of fact persisted, and emphasised its duty—mandated by the CAC and the Constitutional Court—to rehear the matter inquisitorially rather than truncate it through a preliminary exception.

Key Issues

Whether the Commission’s pleaded facts, taken at face value, disclose a merger as defined in section 12(2)(g).

Whether an exception is an appropriate procedural mechanism in inquisitorial merger proceedings before the Tribunal.

The proper interpretation of “material influence over policy” in circumstances where control is alleged to flow from contractual undertakings rather than shareholding.

Held

The Tribunal held that the Commission’s averments, if ultimately proven, could sustain a finding of control under section 12(2)(g). It therefore dismissed MultiChoice’s exception.

The Tribunal further held that deciding the matter on exception would contradict binding instructions from the CAC and Constitutional Court to conduct a full, evidence-based rehearing using the Tribunal’s inquisitorial powers.

THE FACTS

The dispute originates from a 3 July 2013 Commercial and Master Channel Distribution Agreement between MultiChoice and the SABC. Under the Agreement, the SABC’s free-to-air channels would be carried unencrypted on MultiChoice’s pay-TV platform. MultiChoice undertook to pay roughly R553 million for these carriage rights, with termination provisions enabling it to withdraw if the SABC encrypted its channels.

Prior to concluding the Agreement, the SABC had publicly supported set-top-box (STB) controls and conditional-access encryption in the migration to digital-terrestrial television. The applicants allege that, in negotiations, MultiChoice insisted the SABC abandon encryption. After the Agreement was signed, the SABC reversed its stance and advocated for unencrypted broadcasting, a shift the Commission says endured for years.

In February 2015 the public-interest applicants applied to compel notification of the Agreement as a merger. The Tribunal initially dismissed the application, but the CAC on appeal ordered the Commission to investigate. After protracted litigation—including a Constitutional Court ruling that the Commission could use its Chapter 5B subpoena powers—the Commission reported in November 2018 that a notifiable change of control had occurred.

THE ISSUES

The principal legal question was whether the Agreement gave MultiChoice the ability to materially influence the SABC’s policy on encryption, thereby constituting control under section 12(2)(g). Connected to that was whether this alleged control triggered the merger-notification regime.

A procedural issue arose: could the Tribunal dispose of the matter on exception, treating the Commission’s allegations as insufficient in law, or was a full inquisitorial rehearing—contemplating oral evidence—required by higher-court orders?

ANALYSIS

The Tribunal began by surveying the procedural landscape. Rule 55(1)(b) of its Rules permits reliance on High-Court practice, but exceptions must be adapted to the Tribunal’s sui generis, inquisitorial mandate. Earlier Tribunal authority (Invensys; Coolheat) warns against deciding mixed law-and-fact matters prematurely where competition-law context matters.

Turning to section 12(2)(g), the Tribunal adopted the CAC’s exhortation in Murray & Roberts v Aton: material influence is a “fact-intensive” enquiry lacking bright-line tests. The Tribunal held that the Commission’s allegations—namely that MultiChoice induced a reversal of SABC encryption policy and preserved its own pay-TV dominance—were squarely within the mischief section 12(2)(g) seeks to address.

The Tribunal placed considerable weight on the instructions from the CAC and the Constitutional Court. Those courts directed a full rehearing with the Tribunal’s inquisitorial powers brought to bear. Deciding the matter on exception would thwart that mandate, ignore unresolved factual disputes (e.g., the extent and durability of the SABC’s policy shift), and risk undermining the public-interest objectives of the Act.

REMEDY

The Tribunal dismissed MultiChoice’s exception application in its entirety. The main application will proceed to a substantive inquisitorial rehearing where oral evidence may be led, and the Tribunal will ultimately determine whether the Agreement is a notifiable merger and what remedial orders, if any, are appropriate.

LEGAL PRINCIPLES

First, section 12(2)(g) of the Competition Act is interpreted broadly: control can arise from contractual rights that confer material influence over key strategic policy, even absent shareholding or board representation.

Secondly, in merger-control matters involving public-interest dimensions, the Competition Tribunal must adopt an inquisitorial posture, actively probing evidence rather than relying solely on adversarial pleadings or the Plascon-Evans test.

Thirdly, an exception will not succeed where the pleaded facts—taken at face value—could conceivably establish a cause of action; complex questions of mixed law and fact favour a full hearing. This principle safeguards the integrity of merger regulation by ensuring potentially anti-competitive arrangements are thoroughly tested against evidence.