Ad firm to pay penalty
OUT-OF-HOME advertising firm Provantage Media, one of the 30 media companies listed in a complaint filed with the Competition Tribunal for price fixing and fixing of trading conditions, has admitted to contravening the Competition Act.
The Competition Commission is asking the tribunal to confirm an administrative penalty of R1094222, as a percentage of Provantage’s annual turnover for the year ending 2016.
In terms of the proposed settlement agreement, Provantage undertakes to provide either 25% bonus in advertising space or a 25% discount for every rand of advertising space bought by all qualifying small agencies.
Provantage will also have to contrib- ute R393920 to the Economic Development Fund over three years from the date of confirmation of the consent agreement.
The matter relates to an investigation that was initiated in 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, while non-members were offered 15% discount on payments made within 45 days of the date of the statement.
The respondents also agreed to charge a 50% cancellation fee in respect of all ads that agencies withdrew at least 24 hours before publication. – 701068