Cash-strapped public broadcaster the SABC, Primedia and Ster-Kinekor have agreed to pay millions of rand in penalties, bonus advertising and Economic Development Fund (EDF) contributions in a settlements agreement with the Competition Commission. Photo: African News Agency (ANA)

PRETORIA – Cash-strapped public broadcaster the SABC, Primedia and Ster-Kinekor have agreed to pay millions of rand in penalties, bonus advertising and Economic Development Fund (EDF) contributions in a settlements agreement with the Competition Commission.

The agreement, still to be confirmed by the Competition Tribunal, says the SABC agreed to pay a fine of R31.8 million, Primedia a penalty of R9.6m and Ster-Kinekor a R436 999.90.

The fines follow the admission of the media companies to price and trading fixing in contravention of the Competition Act.

The SABC would also provide 25 percent bonus advertising space for every rand of advertising space bought by qualifying small agencies over three years, capped at R40m a year and totalling R120m for the entire period, plus a further R17.79m contribution to the EDF over a three-year period.

Primedia would provide 25 percent bonus advertising space capped at R24m a year and totalling R72m over three years and Ster-Kinekor R1m a year in 25 percent bonus advertising and R3m for the three-year period.

Primedia would further contribute R3.45m to the EDF over a three-year period and Ster-Kinekor R157 319.96, also over three years. The EDF is to be managed and administered by Media Development and Diversity Agency.

Nine media companies, including DStv Media Sales, Caxton and Independent Media have concluded settlement agreements.

They are DStv Media sales, which agreed to pay a R22.6m fine; Independent Media (R2.2m fine); United Stations (R423 920.73); Caxton & CTP Publishers and Printers (R5.8m); Provantage Media (R1.09m); Media24 (R13.8m); MTV Networks Africa (R966 692.83); Mediamark (R1.01m) and Trudon (R423 920.73).

With the exception of Trudon, these companies also agreed to contribute to the EDF and provide bonus advertising. A further 18 media companies, including the Mail & Guardian, Avusa Media and Continental Outdoor, have not entered into consent agreements with the commission and were facing prosecution by the tribunal.

The case relates to an investigation initiated by the commission in November 2011 that found various media companies agreed through the Media Credit Co-Ordinators (MCC) to offer similar discounts and payment terms to advertising agencies that place 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's investigation further found the implicated companies, as MCC members, employed the services of an intermediary company called Corex to perform risk assessments on advertising agencies for purposes of imposing a settlement discount structure and terms on advertising agencies.

The commission concluded that these practices restricted competition among the competing companies as they did not independently determine the discounts and thereby fixed the price and trading terms in contravention of the Competition Act.

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