The Competition Commission has brought a case against Media24 for allegedly deliberately pushing a competitor out of the community newspaper advertising market, the Competitions Tribunal said on Thursday.<\/p>\n
The case centres on a complaint brought by the commission that Media24, between 2004 and 2009, deliberately drove competitor Gold-Net News out of the community newspaper advertising market.<\/p>\n
The commission alleges that Media24 did this by positioning a competing community newspaper called Goudveld Forum in opposition to Gold-Net News, and ran the newspaper at a loss until Gold-Net News closed down in 2009.<\/p>\n
After Gold-Net News’s closure, the commission alleges Media24 closed down Goudveld Forum, and either retrenched its staff or redeployed them to other Media24 publications.<\/p>\n
One of those publications included Vista, which operated in the same geographic area as Gold-Net News and Goudveld Forum.<\/p>\n
Media24 has denied the commission’s allegations, stating that Goudveld Forum covered its costs between 2004 and 2009.<\/p>\n
The company also said there was no truth to Goudveld Forum being kept open so it could deter competition against Vista.<\/p>\n
Media24 also denied that Gold-Net News closed down due to anti-competitive strategies on Media24’s part, citing the 2008 economic downturn and other possible reasons for Gold-Net News’s decline and subsequent closure.<\/p>\n
The complaint arose after Berkina Twintig, trading as Gold-Net News, filed a case against Media24 with the Competition Commission in 2009.<\/p>\n
Gold-Net News claimed that from 2004 to 2009, Media24 drastically reduced its advertising rates below its production and overhead costs, leading to Gold-Net News reducing its advertising rates to unsustainable levels.<\/p>\n
Following an investigation, the commission believed such conduct to be in contravention of the Competition Act, which prohibited dominant firms from unjustifiably setting prices below cost.<\/p>\n
The conduct allegedly took place in what the commission termed the Goldfields area.<\/p>\n
The Goldfields area comprised the towns of Welkom, Odendaalsrus, Allanridge, Riebeeckstad, Virginia, Henneman, Bronville, Jerusalem, Wesselbron, Bultfontein, Theunissen, Ventersburg, Thabong, Meloding, Kutluanong, and Phomolong.<\/p>\n
According to the commission, Media24’s conduct resulted in both advertisers and readers being deprived of the benefit of competition between community newspapers.<\/p>\n
The tribunal’s hearing was set to take place between November 4 and 29.<\/p>\n
Ten witnesses were expected to testify on behalf of Media24, and seven for the commission.<\/p>\n
Below-cost pricing cases were rare, with the case against Media24 being the first such instance brought by the commission to the Competition Tribunal in its 14-year history.<\/p>\n
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