The Competition Commission welcomes the Competition Tribunal’s confirmation of a consent agreement reached between the commission and advertising media company Primedia Outdoor.
The February 13 2024 tribunal order follows the commission’s investigation. It found that between September 2004 and March 2018, media firms entered into collusive agreements which fixed prices and trading conditions in contravention of section 4(1)(b)(i) of the Competition Act, 89 of 1998 (as amended). The firms were operating under the auspices of an industry association Out of Home Media South Africa (OHMSA).
Initial complaint
In December 2018, the commissioner initiated a complaint. It alleged that various media firms, under OHMSA, agreed to develop a code of practice and standards. These fixed payment and settlement terms, penalties and cancellation fees. All these were imposed on advertising agencies, advertisers and poster buying specialists who purchase advertising space from them.
Tribunal
At the conclusion of its investigation, the commission referred the complaint to the tribunal for adjudication. Primedia, one of the respondents in the matter, has settled with the commission. It agreed to pay an administrative penalty of R2,717 950. Primedia has also agreed to provide free out-of-home advertising services to small, medium and micro enterprises (SMMEs). Those SMMEs that are owned by historically disadvantaged persons (HDPs) to the value of R1,358 975. This will be over a period of 12 months.
First respondent
Primedia is the first respondent to settle with the commission. “The commission is encouraging the remaining 12 respondents to settle the case against them,” said commissioner Doris Tshepe.
Background
The allegations against the respondents are that from around September 2004 to about March 2018, OHMSA issued the Code of Practice and Standards for its members.
The code recorded the following arrangement between the respondents:
• Where an Out of Home Media campaign is cancelled by an advertiser or the advertising agency, a cancellation fee of 75% of the balance of the contract is payable to the media owner;
• Where illumination of a sign has been sub-standard for a month or part thereof, 25% of the monthly rental fee is to be credited to the customer;
• Where a client or advertising agency is responsible for the supply of material for display on or in Out of Home Media and such material is delivered later than the date agreed, the media owner will be entitled to charge for full period of exposure without any compensation for late flighting; and
• Where campaigns run for three months or less, a fee for removal of faces or blanking of boards will be levied. This conduct may amount to price fixing and/or fixing of trading conditions in contravention of section 4(1)(b)(i) of the Act.
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