Competition authorities to prosecute 28 media companies for cartel conduct

27 Feb 2018 | Admin Author

JOHANNESBURG, February (ANA) - The Competition Commission said on Tuesday that 28 media companies, including the public broadcasting South African Broadcasting Corporation (SABC), have been referred to the Tribunal for prosecution on charges of price-fixing and the fixing of trading conditions.

The matter relates to an investigation that was initiated in 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.

The Commission said that MCC accredited agencies were offered a 16.5 percent discount, while non-members were offered 15 percent.

This is the same offense for which DStv Media Sales agreed to pay a more than R22.2 million administrative penalty, while Caxton & CTP Publishers and Printers agreed to pay more than R5.8 million, and Independent Media agreed to more than R2.2 million two weeks ago after they admitted to the charges.

In addition, the Commission found that the implicated companies, through MCC, employed services of an intermediary company called Corexalance 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 referring the matter to the Tribunal for prosecution, the Commission seeks an order declaring that the media companies contravened the Act and are liable to pay penalties in terms of the Act.

Competition Commissioner, Tembinkosi Bonakele, said in a statement that this was one of the legacy media practices that survived the introduction of the Competition Act in South Africa.

"It is a problem because it consolidates operations of a few media houses that gang up against mainly small advertising agencies," Bonakele said.

"It is encouraging that some media houses have settled the matter and will also be directly contributing towards promoting the entry of small and black advertising agencies."

The media companies are:

1. SABC

2. Media 24

3. Primedia

4. Mail & Guardian

5. Avusa Media

6. Mtv Networks Africa

7. Media 24 Magazines

8. Primedia Outdoor

9. Cinemark

10. Comutanet

11. Conde Nast Independent Magazine