Tribunal to hear abuse of dominance case against Media24

NOTICE OF UPCOMING COMPETITION TRIBUNAL HEARINGS

(Following is a guideline for journalists. The information can be used but please do not quote Nandi Mokoena or the Tribunal)

Case(s)

Competition Commission v Media24 Limited

Date 

12, 13, 15, 18 – 22, 28, 29 November 2013 and 24 – 28 February 2014 and 10 – 14 March 2014

Time

12 November at 14H00

Remaining days at 10H00

Place

The dti Campus

77 Meintjies Street

Mulayo Building, (Block C)

Sunnyside, Pretoria

Tel: +27 (0) 12 394 3300

Fax: 27 (0) 12 394 0169

Website: http://www.comptrib.co.za  

Media24 accused of pushing rival out of the market

From Tuesday 12 November, starting at 14H00, the Competition Tribunal will hear a complaint brought by the Competition Commission against Media24. The Commission alleges that between 2004 and 2009 Media24 deliberately drove a competitor, Gold-Net News, out of the market for advertising in community newspapers. According to the Commission Media24 did this by positioning a competing community newspaper, titled Goudveld Forum, as a “fighting brand” against Gold-Net News and running the brand at a loss until Gold-Net News eventually closed down in 2009. Having succeeded with this strategy, the Commission alleges, Media24 closed Goudveld Forum in January 2010 and either retrenched Goudveld Forum staff or redeployed them to other Media24 publications, including Vista which operated in the same geographic area as Gold-Net News and Goudveld Forum.  

Media24 has denied the Commissions allegations saying, amongst other things, that Goudveld Forum covered its costs during the 2004-2009 period and that there was no truth to the allegation that Media24 kept Goudveld Forum open in order to inhibit or deter competition with Vista. Media24 also denied that Gold-Net News closed down due to anti-competitive strategies on Media24’s part citing the 2008 economic downturn and other possible reasons for Gold-Net News’ decline.

The complaint comes after Berkina Twintig (Pty) Ltd trading as Gold-Net News filed a case against Media24 with the Competition Commission in 2009. Gold-Net News claimed that from 2004 to 2009 Media24 drastically reduced its advertising rates to a level lower than its production and overhead costs leading Gold-Net News to reduce its advertising rates to unsustainable levels. Following an investigation, the Commission found this conduct to be in contravention of the Competition Act which prohibits dominant firms from unjustifiably pricing below cost. The conduct allegedly took place in what the Commission termed ‘the Goldfields area’. This area comprises Welkom, Odendaalsrus, Allanridge, Riebeeckstad, Virginia, Henneman, Bronville, Jerusalem, Wesselbron, Bultfontein, Theunissen, Ventersburg, Thabong, Meloding, Kutluanong and Phomolong. According to the Commission, Media24’s conducted resulted in both advertisers and readers being deprived of the benefit of competition between community newspapers.

The Tribunal’s hearing into these allegations is set to take place between 12 November 2013 and 14 March 2014. The Tribunal expects to hear testimony from 10 witnesses on behalf of Media 24 and 7 witnesses testifying on the Commission’s behalf including Wian Bonthuyzen, a former Media24 employee who operated in the Free-State and Northern Cape area. Cases alleging below-cost pricing are rare in competition matters and this is the first such case to be referred to the Tribunal, by the Commission, in its 14 year history.

Issued By:    

Nandi Mokoena
Communications: Competition Tribunal
Cell: +27 (0) 82 399 1328
E-mail: NandisileM@live.co.za or NandiM@comptrib.co.za

On Behalf Of:

Lerato Motaung
Registrar: Competition Tribunal
Tel: (012) 394 3355
Cell: +27 (0) 82 556 3221
E-Mail: LeratoM@comptrib.co.za