DStv Media Sales has admitted to price fixing and the fixing of trading conditions in contravention of SA’s Competition Act. The admission forms part of a consent agreement concluded between the company and the Competition Commission.
In terms of the consent agreement filed with the Competition Tribunal on Thursday‚ DStv Media Sales has agreed to an accumulative remedy of R180m. It agreed to pay an administrative penalty amounting to R22.2m.
The company will also pay R8m to the Economic Development Fund over three years‚ to enable the development of small, black-owned media or advertising agencies requiring assistance with start-up capital, and to assist black students requiring bursaries to study media or advertising‚ among other things.
This will be managed by the Media Development and Diversity Agency and audited annually.
DStv Media Sales has further agreed to provide 25% in bonus airtime for every rand of airtime bought by qualifying small agencies. This aims to help smaller agencies participate in the market. The bonus airtime will be provided for three years and is subject to a total annual airtime cap of R50m.
The matter 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. 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%.
The commission found that the practice restricted competition among the companies as they did not independently determine an element of price in the form of discount or trading terms. This amounts to price fixing and the fixing of trading conditions.
The consent agreement is awaiting confirmation as an order by the tribunal.