DStv unit to pay R180m fine for price fixing

1 June 2017

Regulation & Policy

DStv Media Sales has been fined R180million for price fixing and the fixing of trading conditions in contravention of the Competition Act.

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 per cent discount for payments made within 45 days of the statement date, while non-members were offered 15 per cent.

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, stated a tribunal statement.

A fine was then imposed by the Competition Tribunal as part of a consent agreement reached between the parties on Thursday.

The tribunal imposed an administrative penalty of R22,3million and the DStv unit will also have to pay an additional R8million to the Economic Development Fund for the next three years.

The money received will be used to assist with start-up capital and to help black students requiring bursaries to study media or advertising, and will be managed by the Media Development and Diversity Agency, who will ensure that the amount is audited annually.

DStv Media Sales has also agreed to provide 25 per cent 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 R50million, the tribunal statement further read.

DStv Media Sales agreed to cooperate with the Competition Commission in its investigation and has accepted responsibility for being party to this industry practice, said MultiChoice.

Source: Tech Central