Kenya competition landscape active

kenya

Zuku pay-TV launched complaint against DStv in Kenya

As we reported in “Your Choice“, MultiChoice has been an active (if unwilling) player in African antitrust news.  Zuku pay-TV has recently requested the Competition Authority of Kenya (CAK) to impose a financial penalty on DStv for refusing to re-sell some of its exclusive content like the English Premier League to its rivals.

In its letter to the CAK, Zuku pay-TV accuses MultiChoice, the owners of DStv, of abusing its dominance and curbing the growth of other, competing pay-TV operators. Furthermore, Zuku pay-TV requested the CAK to compel DStv to re-sell some of its exclusive content and impose a financial penalty, which can be up to 10 per cent of a firm’s annual sales, on the South Africa firm. According to Zuku pay-TV, DStv has a market share of 95% in Kenya.

The CAK has not indicated whether it is investigating the complaint yet.

Mr Wang’ombe Kariuki, director of the CAK
Kenya to get leniency policy

In addition to the ongoing pay-TV antitrust dispute, the CAK has drafted a law (the Finance Bill of 2014) which will create a Kenyan cartel leniency programme in order for whistleblower companies and their directors to get off with lighter punishment, for volunteering information that helps to break up cartels, as AAT reported here.

To recap the leniency programme will either grant full immunity for applicants or reduce the applicant’s fines, depending on the circumstances. The Finance Act 2014 is awaiting its third reading in Parliament.

The introduction of a leniency programme in Kenya is a pleasing sight due to leniency programmes’ proving to be an integral and vital tool for uncovering cartels in every jurisdiction in which it has been deployed.

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Commissioner calls agency’s work “reactive”, will appeal SABMiller case, counters “toothless dog” moniker

South Africa Flag

Revelations from Bonakele’s interview with CNBC Africa

South African interim Competition Commissioner Tembinkosi Bonakele called his agency, the Competition Commission (“Commission”), a “kind of reactive” enforcement body, aiming primarily to uncover cartel conduct.  In an interview with CNBC Africa‘s “Beyond Markets” segment, journalist Nozipho Mbanjwa asked the acting Commissioner tough questions on the Commission’s enforcement tactics, legislative mandate, fines imposed, the adequacy of the Commission’s capitalization, and whether the South African antitrust watchdog was, in fact, a “toothless dog.”

Bonakele held his ground, referring multiple times to the Commission’s recent successes, including the construction cartel, the bread case, cooking oils, and other “basic products” matters on which he said his agency would place the largest focus going forward.

The Acting Commissioner

The Acting Commissioner

Some of the highlights from the interview:

  • Bonakele is “quite satisfied” with the agency’s funding and performance of its 180 staff, but may ask for “more funding” specifically for the Commission’s sectoral health-care inquiry.
  • The Commission will focus its cartel-busting efforts on sectors in the basic products category such as foods and health-care.
  • The Commission will “definitely appeal” its loss of the SABMiller abuse-of-dominance matter, a “very tricky kind of offence in terms of competition law” according to Bonakele.  He said he did “not like” the 7-year long duration of the SABMiller saga, but felt compelled to extend the matter by bringing the case before the Competition Appeal Court.
  • “No comment” on the “classic” Unilever investigation.
  • On the much-maligned MultiChoice broadcaster, Bonakele called the company a “monopoly created by legislation” in a regulated market, and deferred to parliament to rectify the situation.
  • The Commission receives approximately 30% of its funds from revenues that are the result of merger filing fees.

Television antitrust saga continues, MultiChoice in the cross-hairs again

Interest group seeks antitrust investigation in free-to-air channels

According to a press release by the Independent Communications Authority of South Africa (ICASA), the organisation proposed last Friday a Competition Commission investigation into purportedly horizontal agreements between the South African Broadcasting Corporation (SABC) and MultiChoice.  “This follows an agreement entered into between the two parties in July 2013 whereby the SABC would have to provide a 24-hour news channel on MultiChoice’s DSTV platform,” spokesman Paseka Maleka said.

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MultiChoice in the Cross-Hairs

AAT had reported previously on MultiChoice’s competition woes, including its Botswana Pay-TV and Kenya sports broadcasting headaches, as well as the original post on the S.A. sports-TV rights complaint by rival On Digital Media (“ODM”), which resulted in a referral to ICASA.

The South African publication The Citizen also reported the most recent ICASA attack, noting the alleged “restrictive horizontal practices involved collusion and certain competitor agreements and practices, while restrictive vertical practices involved certain customer or supplier arrangements.”

The full text of the ICASA statement follows:

Johannesburg – The Independent Communications Authority of South Africa has recently requested the Competition Commission to investigate a possible restrictive horizontal practice between the South African Broadcasting Corporation (SABC) and MultiChoice. This follows an agreement entered into between the two parties in July 2013 whereby the SABC would have to provide a 24-hour news channel on MultiChoice’ DSTV platform.

News reports at the time indicated that the agreement also contained an obligation relating to set-top-box control in which the SABC is alleged to have agreed that it will transmit its free-to-air channels without encryption.

In the context of the ongoing public dispute between e.tv and MultiChoice over whether free-to-air TV services should utilise set-top-box control, the question arises as to whether the agreement between the SABC and MultiChoice, as it affects the issue of set-top-box control, may constitute a form of restrictive horizontal practice in the television market.

ICASA has requested both the SABC and MultiChoice to provide a copy of the agreement but both parties have failed to honour that request. This failure has made it difficult for the Authority to verify the claim put forward by MultiChoice that `any contractual obligation upon the SABC to continue to transmit its free-to-air channels in the clear (i.e. without encryption) is an incident of the distribution arrangements agreed upon by the SABC and MultiChoice. Such obligation, as indicated forms part of an agreement between parties in a vertical relationship and is not, as alleged, a horizontal restrictive practice’.

As the issue of restrictive horizontal practices falls within the scope of Section 4 of the Competition Act, the Authority has requested that the Competition Commission open an investigation into this matter.