Fin24

Competition watchdog to probe media

2011-08-01 09:15

Johannesburg - The Competition Commission was investigating "information sharing and market allocation between the major publishing groups" in KwaZulu-Natal, Business Report said on Monday.

This was contained in the commission's report about its investigation into Naspers [JSE:NPN] Media24 division planning to buy the 50% of Natal Witness which it does not yet own.

The commission said it had found evidence that the major publishing groups in KwaZulu-Natal were sharing information and market allocation.

"The co-ordination seems to be centred on the paid-for market but may also extend into the free newspaper market. This finding may not be merger specific but it is indicative of a possible history of co-ordination in this market and it will be investigated further by the commission separate to the merger investigation," says the commission's report.

In 2000, Media24 acquired 50% of the issued share capital of Natal Witness from the Craib family, which had controlled the newspaper from 1942.

Last July, Media24 signed an agreement to buy the remaining 50% shares in The Natal Witness Printing and Publishing Company, the holding company of The Witness.

The Competition Commission has recommended conditional approval for this deal.

However, it would start investigating "very soon" the possible information sharing between KZN media companies, said Martin van Hoven, manager of mergers and acquisitions at the commission, according to Business Report.

The commission was concerned that media companies were sharing their provincial circulation figures with each other. This could lead to a lessening of the competitive environment, which would force advertisers to buy advertising space across product and geographic space.