28/02/2018 06:27 SAST | Updated 28/02/2018 06:27 SAST

Major Media Houses Could Be Fined Millions For Alleged Price-Fixing

28 media houses have been referred to the Competition Tribunal after an investigation into price-fixing.

Graeme Williams/Bloomberg via Getty Images

All of the country's major media houses, all 28 of them, could face paying steep fines for alleged price-fixing and fixing of trading conditions, eNCA reported. The companies include Media24, the SABC, the Mail & Guardian, Primedia, Avusa Media (now called Tiso Blackstar) and Associated Media.

The companies were referred to the Competition Tribunal after being investigated by the Competition Commission.

The investigation reportedly found that the media houses offered similar, larger discounts for bigger advertisers, or advertisers belonging to an industry body group. But non-members were offered smaller discounts.

The Competition Commission reportedly said this restricted competition between the companies as they did not independently determine discounts offered to advertisers. The companies could face paying as much as 10% of their turnover, eNCA reported.

Caxton and Independent Media have already paid massive fines relating to the price-fixing allegations, after reaching agreements with the Competition Tribunal. According to The Media Online, Independent Media said the "price fixing" took place before its current owner, Sekunjalo, purchased the company.

Caxton reportedly said it believed that the allegations were "contestable", but preferred to pay the fine instead of going through a lengthy legal battle. Caxton group chairperson Paul Jenkins reportedly said the practice of offering higher discounts to industry body member advertisers was a "structural mechanism between the advertising and media industries that have been in existence for over 100 years internationally".

Part of the fines will go to the Economic Development Fund, designed to develop black-owned small media or advertising agencies.

DStv, owned by Naspers, also settled with the Commission and paid a fine, according to MoneyWeb.

According to Eyewitness News, the Commission's Sipho Ngwema said,

"Media companies are competitive so when they formed the company called Media Credit Coordinated, through that company, as competitors, they sat down and agreed on the prices and condition for advertising agencies. When companies are competing, the law prohibits them to share and coordinate prices."

HuffPost SA is part of Media24, which is owned by Naspers.