SABC to lose R120m in three years for participating in price-fixing

Business

The cash-strapped SABC will lose R120million over the next three years as a penalty for participating in price-fixing.

Competition Commission spokesperson Sipho Ngwema said on Wednesday that the Competition Tribunal confirmed settlement agreements concluded with the SABC, Primedia and Ster-Kinekor.

“The three media companies admitted to being involved in price-fixing and the fixing of trading conditions, in contravention of the Competition Act,” said Ngwema.

The commission started its probe in November 2011 and found that several media companies offered similar discounts and payments to advertising agencies.

Media outlets colluded with Media Credit Co-ordinators to offer similar discounts and payment terms to advertising agencies, the commission found.

“It found that the 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,” said Ngwema.

The administrative penalty imposed on the public broadcaster was R31.8m.

“The SABC will also provide 25% bonus advertising space for every rand of advertising space bought by qualifying small agencies, over three years and capped at R40m annually. This will amount to R120m for the entire period,” Ngwema added.

“They will further contribute R17.79m to the Economic Development Fund (EDF) over a three-year period.”

Unions are hoping this massive financial loss won’t hurt workers at the SABC, which threatened to carry out retrenchments last year.

“Generally, we’re worried about the state of the SABC as a whole,” said Aubrey Tshabalala, general secretary of the Communication Workers Union.

“They’ve been reporting that they want R3.5billion to turn things around. It tells you that they are in a dire financial state.”

Saying it was not surprising that the SABC was involved in price-fixing, Tshabalala reiterated the union’s call for a review of the broadcaster’s funding.

“Once you have a public broadcaster that is solely reliant on funding that comes through commercials, you have a problem. That says it is no longer a public broadcaster but a commercialised station. As a result, you’ll find people doing all funny things (like price-fixing),” he said.

Primedia’s administrative penalty was set at R9.6m. The 702 owner will also contribute R3.4m to the EDF and lose R72m of its advertising bonus for three years.

Ster-Kinekor was fined R437000 and will lose R3m of ad revenue over three years. The company will contribute R157 319 to the EDF.

The Star

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