Consent settlement agreements concluded with SABC, Primedia and Ster-Kinekor

On 27 February 2019, the Competition Tribunal confirmed three consent settlement agreements concluded with the SABC, Primedia and Ster-Kinekor as orders.

The case related to an investigation from November 2011, in which the Competition Commission of South Africa found that various media companies agreed to offer similar discounts and payment terms to advertising agencies that placed advertisements with members of the Media Credit Co-ordinators (MCC). Specifically, MCC-accredited agencies were offered a 16.5% discounts for payments made within 45 days of the statement date, while non-members were offered 15%.

The Competition Commission found that the practices restricted competition amongst the competing companies, as they did not independently determine the discounts. The Competition Commission concluded that this constituted fixing the price and trading terms, in contravention of the Competition Act, 1998.

The SABC, Primedia and Ster-Kinekor admitted to being involved in price-fixing and the fixing of trading conditions. In terms of the settlement agreement, the media companies provided the following undertakings:

• SABC: Payment of an administrative penalty of R31 845 795.33; provision of 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, to the value of R120 million over three years; and a contribution of R17 797 645.97 to the Economic Development Fund (EDF) over three years.
• Primedia: Payment of an administrative penalty of R9 605 884.64; provision of 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, to the value of R72 million over three years; and a contribution of R3 458 118.47 to the EDF over three years.
• Ster-Kinekor: Payment of an administrative penalty of R436 999.90; provision of 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, to the value of R3 million over three years; and a contribution of R157 319.96 to the EDF over three years.

The EDF will be managed and administered by the Media Development and Diversity Agency.

The media statement published by the Competition Commission is accessible here.

Please note: The information contained in this note is for general guidance on matters of interest, and does not constitute legal advice. Power Singh Inc. was not involved in this matter. For any enquiries, please contact us at [email protected].