DStv Media Sales has agreed to an accumulative remedy of R180 million in terms of a consent agreement entered into with the Competition Commission after admitting to price fixing and the fixing of trading conditions in contravention of the Competition Act.
Sipho Ngwema, the head of communications at the commission, said on Thursday DStv Media Sales agreed to pay an administrative penalty of R22.26 million; pay R8 million to the Economic Development Fund over three years; and to provide 25 percent in bonus airtime for every rand of airtime bought by qualifying small agencies over a period of three years subject to a total airtime cap of R50 million.
The bonus airtime is aimed at helping smaller agencies participate in the market while the intention is to use the payment to the Economic Development Fund to provide start-up capital for the development of black-owned small media or advertising agencies and assist black students requiring bursaries to study media or advertising.
The consent agreement was reached following an investigation launched by the commission in 2011 that found various media companies, through Media Credit Coordinators (MCC), agreed to offer similar discounts and payment terms to advertising agencies that placed advertisements with MCC members.
MCC accredited agencies were offered a 16.5 percent discount for payments made within 45 days of the statement date while non-members were offered 15 percent.
The commission found that these practices restricted competition among the competing companies because they did not independently determine an element of a price in the form of discount or trading terms, which amounted to price fixing and the fixing of trading conditions in contravention of the Competition Act.
The Competition Tribunal still has to confirm the consent agreement.
ABOUT DSTV MEDIA SALES
DStv Media Sales manages commercial airtime and on-air sponsorship, as an integral part of MultiChoice. DStv Media Sales sells airtime on more than 70 commercial channels, along with two terrestrial M-Net channels. Since its foundation in 1995, DStv has been a key member of the Naspers group, providing a range of services from sales and marketing to contracting and credit control.
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