Two media companies fined over R8m for collusion

2018-02-16 13:44 - Lameez Omarjee
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Cape Town – Print media companies Independent Media and Caxton & CTP Publishers and Printers have agreed to pay a total penalty of more than R8m, after admitting to collusion.

According to a statement issued by the Competition Commission on Friday, the companies agreed to pay the separate fines, relating to an investigation dating to November 2011.

The companies admitted to price fixing and fixing trading conditions. The commission’s investigation found that the companies agreed to offer similar discounts and payment terms for advertising agencies which placed advertisements with member companies of the Media Credit Co-ordinators. Member companies were offered a 16.5% discount, while non-members were offered 15%.

The commission also found an intermediary, Corex, was used to perform risk assessments on advertising agencies to impose terms on advertising space and a settlement discount structure.

“The commission found that the practices restricted competition among the competing companies as they did not independently determine an element of a price in the form of discount or trading terms.

“This amounts to price fixing and the fixing of trading conditions in contravention of the Competition Act,” the statement read.

Separate agreements have been confirmed as orders of the Competition Tribunal.

Caxton to cough up over R5m

Caxton owns local newspapers, the Citizen newspaper and magazines Bona, Rooirose and Farmer’s Weekly, among others. The company will pay a fine over R5.8m.

The company agreed to pay just over R2m towards the Economic Development Fund over the next three years. The fund develops black owned small media and advertising agencies by providing start-up capital. It also assists black students with bursaries to study in the field of media and advertising, the commission explained.

Caxton will also provide 25% in bonus advertising space for every rand of advertising space bought by qualifying small agencies. This will be over three years, and is capped at R15m per year.

Independent to pay over R2.2m

Independent, which owns newspapers The Star, Cape Times, Sunday Independent, among others and magazines GQ and GQ Style, has agreed to pay an administrative penalty of more than R2.2m.

The company has also agreed to contribute R799 417 to the Economic Development Fund over three years.

It will also provide 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, over three years. This is capped at R5m per year.

Independent will also obtain its own credit insurance. This means small agencies will not be required to commit any securities or guarantees to book airtime or advertising space.

Similarly, in 2017 DStv media sales admitted to price fixing and fixing trading conditions. The company agreed to pay a R22.2m settlement. It also agreed to contribute R8m to the development fund. It also agreed to the same terms for advertising for small agencies, with an annual airtime capped at R50m.

* CORRECTION: An earlier version of this story said that the companies will pay a fine over R5m. The total fine is in fact over R8m.

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