Caxton and Independent Media the latest to agree to collusion penalties
Both media groups admit to participating in price fixing and fixing of trading conditions
Caxton and Independent Media are the latest media groups to admit price fixing in contravention of the Competition Act and have agreed to a mix of remedies including cash penalties.
On Friday, the Competition Tribunal confirmed the consent agreements reached between the Competition Commission and the companies. Both admitted to participating in price fixing and fixing of trading conditions in contravention of the Competition Act.
The findings date back to an investigation launched by the commission in November 2011 and focused on the activities of an industry body, Media Credit Co-Ordinators (MCC). The investigation found that the media companies used MCC to offer similar discounts and payment terms to advertising agencies that placed advertisements with members of MCC.
The agencies approved by MCC were offered a 16.5% discount for payments made within 45 days while nonmembers were offered 15%.
When it concluded its investigation in 2016 the commission gave the media groups the option of paying a hefty fine and meeting other conditions before it referred the matter to the tribunal for adjudication. The commission said if the companies rejected the offer it would recommend that the tribunal levy a fine of 10% on the company’s 2016 turnover.
In terms of Friday’s consent agreement, Caxton will pay a penalty of R5.8m and contribute R2.1m to the Economic Development Fund over three years. In addition, over the same three years it will give small advertising agencies 25% in bonus advertising space for every rand of advertising space they buy up to an annual value of R15m.
No agreement has yet been finalised with Tiso Blackstar (formerly known as Avusa Media), which publishes Business Day.