Media24 has admitted to price fixing and the fixing of trading conditions and agreed to pay about R14-million in a settlement agreement entered with the Competition Commission.
Media24 is part of 28 media companies referred to the Competition Tribunal for prosecution.
The case relates to a November 2011 investigation 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.
In terms of the Media24 settlement agreement‚ commission spokesman Sipho Ngwema said the company has agreed to pay an administrative penalty amounting to R13‚828‚892.26[tooltip id=”4500c2f113202943ff1ae30d00c9d4ac”] [/tooltip](thirteen million eight hundred and twenty eight thousand‚ eight hundred and ninety two rand and twenty six cents).
Media24 has also agreed to contribute R4‚978‚401.21[tooltip id=”4500c2f113202943ff1ae30d00c9d4ac”] [/tooltip](four million nine hundred and seventy eight thousand‚ four hundred and one rand and twenty one cents) to the Economic Development Fund over a three year period. In addition‚ the company will also provide 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies‚ over three years and capped at R35‚000‚000[tooltip id=”4500c2f113202943ff1ae30d00c9d4ac”] [/tooltip](thirty five million rand) annually.
Out-of-home advertising firm‚ Provantage Media‚ has also admitted to price fixing and fixing of trading conditions‚ Ngwema said. The company has agreed to pay R1m as part of its settlement agreement.
The two agreements have been referred to the Tribunal for confirmation.
Other media companies have also been concluding settlement agreements with the commission. They include Caxton & CTP Publishers and Printers Ltd (fined R5m8m); Independent Media (Pty) Ltd (R2.2m) and DStv Media Sales (Pty) Ltd (R22m).
Sketching the background‚ Ngwema said MCC accredited agencies were offered a 16.5% discount for payments made within 45 days of the 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.[tooltip type=”box” html=”Input Your Content Here” box_background_color=”#eeeeee” box_opacity=”0.95″ box_padding=”10″ box_border_color=”#3F3F3F” box_border_width=”1″ box_border_radius=”0″ id=”4500c2f113202943ff1ae30d00c9d4ac” /]