MultiChoice’s advertising sales business, DStv Media Sales, has been fined R180m for price fixing and the fixing of trading conditions in contravention of the Competition Act.
The fine was imposed by the Competition Tribunal as part of a consent agreement reached between the parties on Thursday.
The tribunal has imposed an administrative penalty of R22,3m and the company will also have to cough up R8m to the Economic Development Fund over three years, to allow for the development of black-owned small media or advertising agencies. The money will be used to assist with start-up capital and to help black students requiring bursaries to study media or advertising. This will be managed by the Media Development and Diversity Agency and audited annually.
DStv Media Sales has further agreed to provide 25% in bonus airtime for every rand of airtime bought by qualifying small agencies. “This aims to help smaller agencies participate in the market. The bonus airtime will be provided for a period of three years and is subject to a total annual airtime cap of R50m,” the tribunal said in a statement.
The matter relates to a November 2011 investigation 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%, the tribunal said in the statement.
The Competition 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.”
In reaction, MultiChoice said DStv Media Sales simply engaged in what is a longstanding practice across the media industry.
“The Competition Commission has now concluded its investigation and found that this practice does indeed contravene the Competition Act. DStv Media Sales cooperated with the Competition Commission in its investigation and has accepted responsibility for being party to this industry practice,” MultiChoice said. — © 2017 NewsCentral Media
