The company has agreed to pay nearly R14 million in a settlement agreement entered with the Commission.
“Media24 is part of 28 media companies referred to the tribunal for prosecution. The case 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,” the Competition Commission said in a statement on Friday.
MCC accredited agencies were offered a 16.5% discount for payments made within 45 days of the statement date, while non-members were offered 15%.
“In addition, the Commission’s investigation found that the implicated companies, as MCC members, employed services of an intermediary company called Corex to perform risk assessments on advertising agencies for purposes of imposing a settlement discount structure and terms on advertising agencies.
“The Commission found that the practices restricted competition among the competing companies, as they did not independently determine the discounts and thereby fixed the price and trading terms in contravention of the Competition Act,” the Competition Commission said.
Media24 has agreed to pay an administrative penalty amounting to R13,828,892.26, in terms its settlement agreement.
Furthermore, Media24 has agreed to contribute R4,978,401.21 to the Economic Development Fund over a three year period.
The company will also provide 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, over three years and capped at R35,000,000 annually.
“In addition, out-of-home advertising firm, Provantage Media has also admitted to price fixing and fixing of trading conditions. The company has agreed to pay R1,094,222 as part of its settlement agreement. The two agreements have been referred to the Tribunal for confirmation,” the Competition Commission said.
To date, the following media companies have concluded settlement agreements with the Commission and agreed, among others, to pay administrative penalties:
The Competition Commission said on 27 February over 20 media companies were referred to the Tribunal for prosecution on charges of price fixing and the fixing of trading conditions in relation to this matter.
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