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DSTV slapped with R180 million penalty for price fixing scandal

  • by African Times
  • 3 Years ago
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PAY chanel DSTV has been caught in a price fixing scandal that will see the company pay millions of rands in fines.

The Competition Commission announced on Thursday that the company had been slapped with a R180 million fine after admitting to contravening the law.

DSTV, which enjoys a satellite TV provision monopoly,  is owned by the country’s biggest media company Naspers, which also owns Media24 and titles such as City Press, Daily Sun, Beeld and Rapport.

It’s chairman is Koos Bekker, who is also the group’s longest serving former CEO.

“DStv Media Sales (Pty) Ltd has admitted to price fixing and the fixing of trading conditions in contravention of South Africa’s Competition Act. The admission forms part of a consent agreement concluded between the company and the Commission. In terms of the consent agreement filed with the Competition Tribunal today, 25 May 2017, DStv Media Sales has agreed to an accumulative remedy of R180m,” Commission spokesperson Sipho Ngwema said.

LAW-BREAKER: Naspers-owned DSTV has been found to have fixed prices by the Competition Commission.

He added that the company had agreed to pay an administrative penalty amounting to R22 262 599 (twenty two million, two hundred and sixty two thousand, five hundred and ninety nine rand).

“The company will also pay R8 000 000 (eight million rand) to the Economic Development Fund over three years, to enable the development of black owned small media or advertising agencies requiring assistance with start-up capital and to assist black students requiring bursaries to study media or advertising, among others. This will be managed by the Media Development and Diversity Agency (MDDA) and audited annually,” he said.

The matter relates to a November 2011 investigation which found that, through the Media Credit Co-Ordinators (MCC), various media companies agreed to offer similar discounts and payment terms to advertising agencies that place advertisements with MCC members.

Ngwema said MCC accredited agencies were offered a 16.5% discount for payments made within 45 days of the statement date, while non-members were offered 15%.

“The Commission found that the practices restricted competition among the competing companies as they did not independently determine an element of a price in the form of discount or trading terms. This amounts to price fixing and the fixing of trading conditions in contravention of the Competition Act.The Commission has filed the consent agreement with the Competition Tribunal for confirmation as an order by the Tribunal,” he added.

PRICE FIXER: DSTV CEO for Media Sales Chris Hitchins.

DStv Media Sales further agreed to provide 25% in bonus airtime for every rand of airtime bought by qualifying small agencies.

Ngwema said that was aimed at helping smaller agencies participate in the market.

The bonus airtime will be provided for a period of three years and is subject to a total annual airtime cap of R50 000 000 (fifty million rand).

Meanwhile, the deputy Competition Commissioner Hardin Ratshisusu, was robbed at gunpoint point.

Ngwema said Ratshisusu was mugged at gun point at the entrance of his complex in Johannesburg as he was getting off a shuttle from OR Tambo International Airport.

He said it seemed he was followed from the airport.

“He was not harmed but all his belongings were taken during the traumatic incident. The Deputy Commissioner was returning from a Competition Commission assignment in Botswana. The Commission has activated all the relevant security interventions and is in contact with police ministry in this regard,” he said.

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