The Competition Commission has found that an agreement between the SABC and Multichoice enabled Multichoice to "influence the strategic direction" of the public broadcaster.
In a statement, it said it had filed a report with the Competition Tribunal where it found that the SABC and Multichoice had implemented a merger transaction without notifying the Commission. This was in contravention of the Competition Act. The report was filed on Friday.
This follows a Constitutional Court judgment on September 28, which granted the Commission the right to investigate whether the Commercial and Master Channel Distribution Agreement between the public broadcaster and Multichoice on July 3 2013 constitutes a notifiable merger. The Commission was then tasked with filing a report to the Tribunal within 30 days.
The Commission found that an undertaking made by the SABC to MultiChoice - in terms of the agreement between them - not to encrypt its Free to Air Channels, prevented new players from entering the market, and therefore protected Multichoice's dominance in the Pay TV market.
Further, it added, failure to seek regulatory approval of a merger transaction before it is implemented constitutes a contravention of competition law.
In a response, the SABC said it had noted "with concern" the Competition Commission's ruling, which had since expired.
"The SABC has since entered into a new commercial channel supply agreement with Multichoice, which in the SABC's understanding, does not constitute a merger," the broadcaster said.
"The SABC Board is reviewing the Commission's recommendations in relation to the encryption part of the 2013 agreement, and will respond appropriately in due course."
It "remained committed" to complying with the applicable compliance laws, it added.
MultiChoice could not immediately be reached by phone for comment.
* Fin24, like MultiChoice, is part of Naspers. This article has been updated to reflect SABC's comment.
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