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SABC, Primedia and Ster-Kinekor get big fines for price-fixing

Ster Kinekor


The Competition Tribunal has confirmed fines for the SABC, Primedia and Ster-Kinekor 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.

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 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.

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

SABC

The SABC will pay an administrative penalty of R31 845 795.33.

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 R40 million annually. This will amount to R120 million for the entire period.

It will further contribute R17 797 645.97 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 R 24 million annually, amounting to R72 million in three years.

The company will also contribute R3 458 118.47 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 annually, totalling R3mmillion.

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).


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