DStv Media Sales has admitted to price fixing and fixing of trading conditions which contravenes the South African Competition Act.
This admission follows an investigation in 2011 which found that various media firms colluded to offer similar discounts and payment terms to advertising agencies. This collusion was facilitated by the Media Credit Co-Ordinators (MCC).
Agencies accredited by the MCC were offered a 16.5% discount on payments with 45 days to pay, non-members were only offered a 15% discount.
“The 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,” the Competition Commission of South Africa said in a statement.
The DStv division has agreed to pay an “accumulative remedy” of R180 million as well as an administrative penalty of R22.2 million.
“The company will also pay R8 000 000 to the Economic Development Fund over three years,” added the Commission.
This R8 million payment will serve to provide black owned media startups with capital investment and assist students that wish to study media or advertising by providing them with bursaries.
The Commission stated that this payment will be managed by the Media Development and Diversity Agency.
[Source – Competition Commission of South Africa]