On Wednesday, February 27, the Competition Tribunal of South Africa confirmed orders of three consent settlement agreements concluded with the SABC, Primedia, and Ster-Kinekor.
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.