The Tribunal has confirmed a consent agreement (a settlement) between Mail And Guardian Media Limited (M&G) and the Commission, in which the company admits to price fixing and agrees to pay an administrative penalty (a fine) of R286 846.39.
 
The Tribunal has already approved other settlements in the same case. Media companies that have already settled include: DStv Media Sales; Independent Media; Caxton and CTP Publishing; Provantage; MTV Networks Africa; Media24; Mediamark; United Stations; Trudon; SABC; Primedia; Carpe Diem; and Ster Kinekor.
 
In terms of the latest settlement, the M&G also agrees to provide 25% in bonus advertising for every rand of advertising space bought by all Qualifying Small Agencies. The bonus advertising space will be capped at R700 000.00 annually, for a period of three years.
 
M&G has further undertaken to contribute R103 264.60 to the Economic Development Fund.
 
Background
 
The settlement follows a Commission investigation launched in 2011. It found that various media companies, through Media Credit Co-Ordinators (MCC), agreed to offer similar discounts and payment terms to accredited and non-accredited advertising agencies that place advertisements with MCC members.
 
Accredited advertising agencies were offered a discount of 16.5% for all payments within a 45-day period from the date of the statement whereas non-accredited advertising agencies were only offered a discount of 15%.
 
The companies, as MCC members, also agreed to employ the services of an intermediary company called Corex to perform risk assessments on advertising agencies for purposes of imposing the above settlement discount structure and terms on advertising agencies.
 
The Commission found that the above-mentioned practices gave rise to a restriction of competition among competing companies in that they did not independently determine an element of price in the form of discount or trading terms. The Commission concluded that these practices amounted to price fixing and the fixing of trading conditions in contravention of the Competition Act.