SABC, Primedia and Ster-Kinekor fined for price-fixing

The Competition Commission has referred the SABC, Primedia and Ster-Kinekor to the Competition Tribunal for cartel conduct.

In a statement released on Sunday (27 January), the commission said that the three media companies admitted to being involved in price fixing and the fixing of trading conditions in contravention of the Competition Act.

The case relates to a 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.

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.

In terms of the settlement agreements, the media companies have undertaken to:

SABC

The SABC will pay R31,845,795 and provide 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, over three years and capped at R40 million annually.

They will further contribute R17,797,645 to the Economic Development Fund (EDF) over a three year period.

Primedia

Primedia has agreed to pay an administrative penalty of R9,605,884

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 R24 million annually, amounting to R72 million in three years.

The company will also contribute R3,458,118  to the Economic Development Fund over a three year period.

Ster-Kinekor

Ster-Kinekor has agreed to pay a fine of R436,999. 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 annually, totalling R3 million.

The company will contribute R157,319 to the Economic Development Fund over a three year period.


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SABC, Primedia and Ster-Kinekor fined for price-fixing