The SABC, Primedia and Ster-Kinekor have admitted to "cartel conduct" and price-fixing and will be paying millions of rands in fines after reaching settlement agreements with the Competition Commission.
This follows an investigation that started in November 2011 which found that the SABC, Primedia and Ster-Kinekor colluded through the Media Credit Coordinators (MCC), with members offering discounts and payment terms to advertising agencies that placed advertisements with other members.
The SABC, Primedia and Ster-Kinekor were also found to have employed an intermediate company named Corex to perform risk assessments on advertising agencies to impose a settlement discount structure on the agencies.
The Competition Commission's investigation found that these practices restricted competition among the companies and that their price-fixing and trading terms contravened the Competition Act.
The SABC, Primedia and Ster-Kinekor have been ordered to pay administrative penalties, provide bonus advertising space to qualifying agencies, and contribute to the Economic Development Fund (EDF).
The SABC has to pay a fine of R31.8 million and provide 25% bonus advertising space for every rand of space purchased by small agencies for the next three years. This is capped at R40 million annually, amounting to a total sum of R120 million over the three-year period.
The SABC must also contribute R17.7 million to the EDF over the next three years.
Primedia agreed to pay an administrative penalty of R9.6 million and will also provide 25% bonus advertising space to qualifying agencies, capped at a value of R72 million over three years. Primedia will also contribute R3.4 million to the EDF over a three-year period.
Ster-Kinekor agreement to pay R436 999.90 as a fine and will provide 25% bonus advertising space to qualifying agencies, capped at a value of R3 million for a period of three years. Ster-Kinekor will pay R157 319.96 to the EDF.
The EDF is managed and administrated by the Media Development and Diversity Agency.
Several other companies have already been fined heavily previously for the same collusion, including MultiChoice's DStv Media Sales, Naspers' Media24 and Caxton.
