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THREE INDEPENDENT MEDIA OWNERS AGREE TO PAY PENALTIES
FOR ALLEGED PRICE FIXING
Three independent media owners who provide, among others, outdoor digital advertising services (such as placing advertisements for display on digital screens), have each separately agreed to pay penalties for alleged price fixing in 2020.
As part of their respective consent agreements with the Competition Commission (“the Commission”), Insight Outdoor (Pty) Ltd (“Insight Outdoor”) agrees to pay a penalty of R65 017.62; Tractor Outdoor (Pty) Ltd (“Tractor Outdoor”) agrees to pay a penalty of R38 585.10; and Relativ Media (Pty) Ltd (“Relativ Media”) agrees to pay a penalty of R24 145.68.
The three separate consent agreements have been confirmed as orders by the Tribunal. These will be available on the Tribunal’s website at www.comptrib.co.za in due course. In summary the firms also agree, in terms of the consent agreements, to the following, among others:
- To refrain from engaging in price fixing or fixing of trading conditions in contravention of section 4(1)(b)(i) of the Competition Act (“the Act”) and from engaging in any prohibited practice in future;
- To independently determine the prices at which they market and sell advertising slots on the digital screens allocated to their common joint venture; and
- To develop, implement and monitor a competition law compliance programme.
Although Insight Outdoor, Tractor Outdoor and Relativ Media have each agreed to the terms of their respective consent agreements, they do not admit that they contravened the Act, as alleged by the Commission. The Commission, in turn, has agreed to enter into the consent agreements with the firms without admissions of liability based on, among others, the following factors, read with the remedies contained in the respective consent agreements:
- The Commission deemed it efficient to resolve this matter by correcting the conduct in the market rather than expending its limited resources on litigation;
- The conduct that is the subject of the respective consent agreements was in place for a relatively short period, was relatively limited in its scope and was suspended by the three firms upon commencement of the Commission’s investigation; and
- The three firms have not previously been found guilty of contravening the Act.
Case background
In June 2020, Primedia Outdoor (Pty) Ltd submitted a complaint against the three firms to the Commission. The Commission’s investigation found that the three firms agreed and/or engaged in a concerted practice to fix the advertising rate card for marketing and selling of digital advertising slots to customers on digital screens. Furthermore, the Commission found:
- Around March 2020, the three firms concluded a Memorandum of Understanding (“MoU”) in terms of which they each contributed certain ‘slots’ on certain of their digital advertising screens into one pool and housed them under an unincorporated joint venture (the “unincorporated JV”). The unincorporated JV was intended to be used to pool slots on these digital advertising screens in order to collectively market and sell the placing of outdoor adverts along Gauteng highways;
- The MoU of the unincorporated JV contained the price fixing agreement between the three firms in that it fixed the rate card for advertising slots contributed by each of the three firms at R10 000.00 per digital screen; and
- In July 2020, the three firms formalised the activities of the unincorporated JV into an incorporated company called Andocan (Pty) Ltd (“Andocan”). Each firm nominated one director into Andocan. Andocan thereafter charged advertisers (customers) the same R10 000.00 rate for one advertising slot of three minute loop, per screen, per month that was previously set by the firms in terms of the MOU.
The Commission concluded that the fixing of the digital advertising rates among the three firms, as described above, constitutes price fixing in contravention of section 4(1)(b)(i) of the Act.
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