MultiChoice risks losing a tenth of its annual revenue if the Competition Tribunal rules that it colluded with electronics maker Altech.
If the commission wins the case, the two companies would be liable for an administrative penalty of up to 10% of their respective annual turnover.
On Monday, the Competition Commission said it has referred a complaint against MultiChoice South Africa and Altech to the Competition Tribunal for prosecution.
The body is seeking an order declaring that MultiChoice, now a unit of French broadcaster Canal+, and Altech contravened section 4 of the Competition Act. The referral, filed on April 15, suggests the parties conspired to divide markets, which is a contravention of the law.
South Africa is by far MultiChoice’s largest segment. Based on the most recent full-year earnings report by MultiChoice, up to March 2025, South Africa’s contribution to group revenue stood at R41.7bn.
The commission said its investigation revealed that in February 2014 MultiChoice and Altech agreed that Altech would not enter or compete in the pay-TV market in which the pay-TV provider operates.
“This arrangement constitutes division of markets by allocating suppliers and /or specific type of goods or services,” the commission said.
At the time, MultiChoice sourced its decoders from Altech, then a unit of JSE-listed Altron’s TMT division.
Altech manufactures set-top boxes (decoders), used to operate subscription-based or pay television services. MultiChoice is a provider of pay-TV, which uses set-top boxes to provide its pay-TV services.
MultiChoice sources the set-top boxes from Altech.
In essence, Altech would not compete directly in pay-TV, a market dominated by a major customer at the time, MultiChoice.
For a brief period, 2014-15, Altech launched its “Node” smart home and video-on-demand device, which was satellite-connected.
Altron positioned the platform as competing in a separate market to MultiChoice’s DStv.
The Node was one in a series of products that were shelved in the early days of video on demand in South Africa.
By mid-2015, the ill-fated Node was on its way out.
In May 2014, Altron CEO Robbie Venter told Business Day TV: “I don’t think it [the Node] was as successful as what we would have wanted in terms of its launch and we are looking at some options in that particular area there to explore partnerships and potential divestment of the business.
“I believe the price point we started with was a bit high and I don’t think Altron has the appetite to necessarily fund or subsidise to a great degree the Node box which is what I believe is required to get it to gain traction.”
The commission investigates market structures while the tribunal has the final say, making rulings on matters referred to it that are legally binding.
• This story has been updated and the subheadline changed.
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