Media fined over price-fixing

The Competition Commission has ordered the SABC‚ Primedia and Ster-Kinekor to pay millions of rands in penalties after media companies admitted to cartel behaviour‚ including price-fixing.

“The three media companies admitted to being involved in price-fixing and the fixing of trading conditions in contravention of the Competition Act‚” commission spokesperson Sipho Ngwema said.

The investigation‚ which started in November 2011‚ found that various media companies offered similar discounts and payments to advertising agencies which placed ads via Media Credit Co-Ordinators (MCC).

MCC-accredited agencies were offered a 16.5% discount if payments were made within 45 days. Other agencies were offered a 15% discount.

The investigation also found the implicated companies used a firm, Corex, as an intermediary to perform risk assessments on advertising agencies for purposes of imposing a settlement discount structure and terms on advertising agencies.

“The commission found that the practices restricted competition among the competing companies as they did not independently determine the discounts and thereby fixed the price and trading terms in contravention of the Competition Act.”

The SABC agreed to:

● Pay a R31.845m administrative penalty;

● Give 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies over three years and capped at R40m; and

● Give R17.797m to the Economic Development Fund (EDF) over three years.

Primedia agreed to:

● Pay a R9.605m administrative penalty;

● Give 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies over three years and capped at R24m; and

● Give R3.458m to the EDF over three years.

Ster-Kinekor agreed to:

● Pay a R436‚999 fine;

● Give 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies over three years and capped at R1m; and

● Pay R157‚319 to the EDF over three years. –