Broadcasting Services

South Africa’s SABC And Ster-Kinekor To Pay Hefty Fine For Price Fixing

The South African Broadcasting Corporation (SABC), Ster-Kinekor movie cinemas and the media house Primedia have admitted to being involved in price-fixing and have signed settlement agreements with the Competition Commission.

This follows an investigation that began in November 2011 which found that the media companies conspired through the Media Credit Coordinators (MCC), with members offering payment terms and discounts to advertising agencies that had placed advertisements with other members.

The agencies were offered a discount of 16.5% for payments made within a specified period of the statement date, while non-members were only offered a 15% discount.

Primedia, Ster-Kinekor and the SABC were also found to have hired an intermediate company named Corex to carry out risk assessments on advertising agencies to force a settlement discount structure on the agencies.

The commission’s investigation found that these methods restricted competition among the companies, and that they fixed trading terms and prices in contravention of the Competition Act.
All three companies have been ordered to pay penalties, provide extra advertising space to qualifying agencies, and also contribute some money to the Economic Development Fund (EDF).

The settlement agreement ordered the SABC to pay a penalty of R31.8 million ($2.3 million) and provide 25% extra advertising space for every rand of space that is purchased by small agencies for the next three years.
The settlement totals at R40 million ($2.9 million) annually, amounting to a final sum of R120 million ($8.8 million) over the three-year period.
The SABC was also ordered to contribute R18.8 million ($1.3 million) to the EDF over the next three years.

Primedia agreed to pay a penalty of R9.6 million ($705 000.00) and will also provide 25% extra advertising space to qualifying agencies, which totals to R72 million ($5.2 million) over three years.
The media house will also contribute R3.5 million ($257 000.00) to the EDF over three years.

Ster-Kinekor was fined R437,000 ($32 000.00) and to give 25% extra advertising space to qualifying agencies, capped at a total of R3 million ($220 000.00) for three years.
Additionally, Ster-Kinekor was ordered to contribute R157,000 (over $11 000.00) to the EDF.

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