Three media companies have agreed to pay R41 million to settle anti-competition charges – and now the Competition Commission is coming for everyone else
The SABC, the parent companies of the Sunday Times, and 26 other media companies have been referred for prosecution on price fixing, the Competition Commission announced late Tuesday afternoon.
Media24, the local parent company of Business Insider South Africa, is among those implicated.
Three other companies have agreed to pay a total of R41 million in penalties and contributions to a development fund to settle the same charges, the Commission said.
Caxton, which publishes a large number of local-area free-sheet newspapers, will pay R5.8 million in penalties and another R2.1 million to the Economic Development Fund.
Independent, publisher of regional titles such as The Star, will pay R2.2 million in fines and just under R800,000 to the development fund.
DSTV Media sales, which handles advertising sales for the satellite company by the same name, will pay R22.2 million in penalties and R8 million to the fund.
“This is one of the legacy media practises that survived the introduction of the Competition Act in South Africa,” said Competition Commissioner, Tembinkosi Bonakele in a media statement. “It is a problem because it consolidates operations of a few media houses that gang up against mainly small advertising agencies. 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 Competition Commission started investigating the media sector in 2011. In 2016 it offered media companies a choice: settle, or face prosecution by the Competition Tribunal which can levy fines of up to 10% of annual turnover.
The Commission found that media companies had used the non-profit company Media Credit Coordinators 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, while non-members were offered 15%."
The development fund is intended to provide small black media and advertising companies with startup capital and will provide black students with bursaries. It is due to be managed by the Media Development and Diversity Agency.
The contributions to the fund are due to be paid over three years.
The full list of companies to be prosecuted as released by the Competition Commission:
- Mail & Guardian
- Avusa Media
- MTV Networks Africa
- Media 24 Magazines
- Primedia Outdoor
- Conde Nast Independent Magazines
- The Citizens
- Spark Media
- Apurimac Media
- Provantage Media
- Carpe Diem Media
- Rodale And Touchline
- Mandla-Matla Publishing
- Ramsay Media
- Lugan Investments
- Associated Media
- Associated Hearst
- United Stations
- Continetal Outdoor
- Media Credit Coordinators
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