Multichoice and Supersport’s dominance could lead to ‘market failure’: CompCom

The Competition Commission has announced that it will not be pursuing complaints against Multichoice and Supersport – but notes there are still big problems in the subscription TV market.

In a statement, the Commission said that between 2012 and 2017 it received various complaints of abuse of dominance against Multichoice and Supersport.

“Following its investigation, the Commission has decided not to prosecute because there are no reasonable prospects of success and a regulatory intervention would be more effective,” it said.

Despite this, the Commission said that there is potential market failure in the market owing to the following factors:

  • The highly concentrated nature of the subscription television market;
  • High barriers to effectively enter the market and the inability of other existing firms to expand in the market;
  • A lack of credible alternative buyers for premium sports rights other than the incumbent (Multichoice);
  • Overly long and exclusive contracts between the incumbent (Multichoice) and some content suppliers; and
  • A lack of credible alternatives to which individual consumers can turn to should they wish to switch away from the incumbent (Multichoice).

“Whilst the Commission is concerned of the likely market failure, it is of the view that there can be more targeted regulatory interventions to foster competition and make this market competitive,” it said.

“In this regard, the Commission has taken note of the inquiry into subscription broadcasting services currently being conducted by the Independent Communications Authority of South Africa (Icasa), which covers a greater scope than the complaints received by the Commission.”

The Commission said that it will continue to contribute to the inquiry and support the work of Icasa in line with the terms of the existing Memorandum of Understanding between the two regulators.

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Multichoice and Supersport’s dominance could lead to ‘market failure’: CompCom