DSTV Media Sales, a subsidiary of Naspers has agreed to pay an accumulative fine of 13.97 million) for price fixing.
“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 Commission said in a statement.
DStv, a digital satellite service is a subsidiary of MultiChoice, which is a unit of Naspers, the biggest listed firm on the continent.
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.
“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,” the commission said.
As part of the consent agreement filed with the Competition Tribunal, which makes the final ruling, DStv Media Sales will pay an administrative penalty of over 22 million rand and pay 8 million rand to the Economic Development Fund over three years.
DStv Media Sales will also provide 25 percent in bonus airtime for every rand of airtime bought by qualifying small agencies for three years, the commission said.
To put into perspective, the level of scrutiny into the activities of DSTV Media Sales in South Africa is higher than what is obtainable in Nigeria. NIgeria’s advertising industry is self-regulated with an Advertising Practitioners Council that only vets advertising content and license agencies. The day to day dealings of agencies and their clients or media owners are not regulated by the Council.
In Nigeria and elsewhere in Africa, Multichoice is a loss-making operation. The company’s 60% market resides in Nigeria where it competes with smaller rivals in the low-end of the market.
There are rumours that Naspers might sell DSTV might sell other African units including Nigeria to MTN Group. Early this week, Naspers announced it has entered into a pay-TV deal with MTN Group. The two companies did not confirm if the deal is towards the rumoured acquisition of the latter.
In its last subscriber data, DSTV said it had a cumulative of 11 million subscribers in Africa. The fact that its African business is not making money for the business is a major concern for Naspers, the parent company with a yearning to make a profit for many media and eCommerce ventures it had stake billions of Dollars in.