SABC, Primedia And Ster-Kinekor Fined Millions For Price Fixing

The Economic Development Fund will be managed and administered by Media Development and Diversity Agency (MDDA).

0
Primedia Broadcasting
Primedia Broadcasting. Image: by Design Indaba

The Competition Commission has referred he SABC, Primedia and Ster-Kinekor to the Competition Tribunal for 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, said the regulator in a statement.

The case relates to an investigation that was initiated in November 2011 which found that,
through the Media Credit Co-Ordinators (MCC), various media companies agreed to offer
similar discounts and payment terms to advertising agencies that place advertisements with MCC members.

MCC accredited agencies were offered a 16.5% discount for payments made within 45 days ofthe statement date, while non-members were offered 15%.

In addition, the Commission’s investigation found that the implicated companies, as MCC members, employed services of an intermediary company called Corex 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.

In terms of the settlement agreements, the media companies undertook to:

SABC

The SABC will pay an administrative penalty of R31.8 million.

The SABC will also provide 25% bonus advertising space for every rand of advertising
space bought by qualifying small agencies, over three years and capped at R 40 million annually. This will amount to R120 million for the entire period.

They will further contribute R17.7 million to the EconomicDevelopment Fund (EDF) over a three year period.

Primedia

Primedia has agreed to pay an administrative penalty of R9.6 million.

It will also provide 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, over three years and capped at R 24 million, amounting to R72 million in three years.

The company will also contribute R3.4 million to the Economic Development Fund over a three year period.

Ster-Kinekor

Ster-Kinekor has agreed to pay a fine of R436 999.90.

It will also provide 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, over three years and capped at R 1 million, totalling R3 million.

The company will contribute R157 319.96 to the Economic Development Fund over a
three year period.

The EDF will be managed and administered by Media Development and Diversity Agency
(MDDA).

Advertisements

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.