Media24 agrees to R14m payment

MEDIA24 has admitted to price-fixing and the fixing of trading conditions and agreed to pay about R14million in a settlement agreement entered with the Competition Commission.

Media24 is part of 28 media companies referred to the Competition Tribunal for prosecution.

The case relates to a November 2011 investigation which found that‚ through the Media Credit Co-ordinators (MCC)‚ various media companies had agreed to offer similar discounts and payment terms to advertising agencies that place advertisements with MCC members.

In terms of the Media24 settlement agreement‚ commission spokesman Sipho Ngwema said the company had agreed to pay an administrative penalty amounting to R13 828 892.26.

Media24 has also agreed to contribute R4 978 401.21 to the Economic Development Fund over a three-year period.

In addition‚ the company will also provide 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies‚ over three years and capped at R35-million annually.

Out-of-home advertising firm Provantage Media had also admitted to price-fixing and fixing of trading conditions‚ Ngwema said.

The company has agreed to pay R1-million as part of its settlement agreement.

The two agreements have been referred to the tribunal for confirmation.

Other media companies have also been concluding settlement agreements with the commission. They include Caxton & CTP Publishers and Printers (fined R5.8-milllion); Independent Media (R2.2million) and DStv Media Sales (R22-million).

Sketching the background‚ Ngwema said MCC-accredited agencies were offered a 16.5% discount for payments made within 45 days of the statement date‚ while nonmembers were offered 15%.

In addition‚ the commission’s investigation found that the implicated companies‚ as MCC members‚ employed the services of an intermediary company called Corex to perform risk assessments on advertising agencies for purposes of imposing a settlement discount structure.

The commission found the practices restricted competition among the companies as they did not independently determine the discounts and thereby fixed the price and trading terms in contravention of the Competition Act. —