Naspers subsidiary Media24 has entered into a settlement with the Competition Commission and will pay an administrative penalty of R13.8-million for participating in price fixing and fixing of trading conditions.
Media 24 joins eight other media houses and advertising agencies who have also reached their own settlements with the commission.
The Competition Tribunal on Wednesday assented to the settlement between Media24 and the Competition Commission.
Aside from the R13.8-million administrative penalty, over a three year period, Media24 will contribute close to R5-million to the Economic Development Fund which focuses on developing small black-owned media and advertising firms. The company has also committed to giving 25% bonus advertising space to advertising purchased by small agencies for three years, capped at R35-million per annum according to a statement by the commission.
Media 24 has also agreed to charge a 50% cancellation fee for all adverts that are withdrawn by advertising agencies 24 hours before publication.
The eight other media companies that have reached a settlement with the commission are DStv which paid R22.3-million, Caxton (R5.8-million), Independent Media (R2.2-million), Provantage Media (R1.1-million), Mediamark (R1-million), MTV Networks Africa (R966 693) and United Stations (R423 921).
The Competition Commission referred 28 companies to the Competition Tribunal in February for prosecution on charges of price fixing and fixing of trading conditions.
The commission’s investigation — which began in 2011 — found that media companies, using Media Credit Coordinators, offered similar discounts and payment terms to advertising agencies. This resulted in the restricting of competition especially for smaller agencies.
The investigation also found that the companies all used intermediary Corexalance (Corex) to perform risk assessments on advertising agencies in order to impose a settlement discount structure and terms.
Read the Competition Commission’s full statement here: