CC And Primedia Outdoor

The judgment

The court's own file

COMPETITION TRIBUNAL REPUBLIC OF SOUTH AFRICA Case No: CO149Dec23In the matter between: The Competition Commission of South Africa Applicant And Primedia Outdoor, a Division of Primedia (Pty) Ltd Respondent Panel: L Mncube (Presiding Member) T Vilakazi (Tribunal Member) A Ndoni (Tribunal Member) Heard on: 13 February 2024 Decided on: 13 February 2024 CONSENT AGREEMENT The Tribunal hereby confirms the consent agreement concluded between the Competition Commission and Primedia Outdoor, a Division of Primedia (Pty) Ltd annexed hereto. 13 February 2024 Presiding Member Prof. Liberty Mncube Date Concurring: Prof. Thando Vilakazi and Ms Andiswa Ndoni IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA (HELD IN PRETORIA) CT Case No: CC Case No:2018Dec0062 In the matter between COMPETIT ION COMMISSION APPLICANT and PRIMEDIA OUTDOOR, A DIVISION OF PRIMEDIA (PTY) LTD RESPONDENT CONSENT AGREEMENT IN TERMS OF SECTION 49D AS READ WITH SECTIONS 58(1)(a)(iil) AND &8(1)(b) OF THE COMPETITION ACT, NO. 89 OF 1998, AS AMENDED, BETWEEN THE COMPETITION COMMISSION AND PRIMEDIA OUTDOOR, A DIVISION OF PRIMEDIA (PTY) LTD (PRIMEDIA OUTDOOR), IN RESPECT OF CONTRAVENTIONS OF SECTION 4(1 )(b)(I) OF THE COMPETITION ACT, 1998, AS AMENDED The Competition Commission and Primedia Outdoor hereby agree that an application be made to the Competition Tribunal for the confirmation of this Consent Agreement as an order of the Tribunal in terms of section 490 read with' section 58(1 )(a)(iii) and 58(1)(b) of the Competition Act, No. 89 of 19981 as amended, in respect of contraventions of section 4(1)(b)(i) of the Act, on the terms set out below. 1. DEFINITIONS For the purposes of this Consent Agreement, the following definitions shall apply: '\� 1.1. "Acr• means the Competition Act1 No. 89of1998, as amended; Page1of8 ' 1.2. 11Commlsalon11 means the Competition Commission of South Africa, a statutory body established in terms of section 19 of the Act, with its principal business address at 1st Floor, Mulayo Building (Block C). the DTI Campus, 77 Meinljies Street, Sunnyslde, Pretoria, Gauteng; 1.3. 11Commlssloner11 means the Commissioner of the Competition Commission, appointed in terms of section 22 of the Act; 1.4. "Complalnt" means the complaint initiated by the Commissioner in terms of section 49B(1) of the Act under case number:2018Dec0052; 1.5. "Consent Agreement'' means this Agreement duly signed and concluded between the Commission and Primedia Outdoor in full and final settlement of Commission case number 2018Dec0062; 1.6. "Day" means any calendar day other than a Saturday, a Sunday or an official public hollday in South Africa; 1. 7. "HDP11 means a historically disadvantaged person as defined In the Act; 1.8. "OHMSA" means Out of Home Media South Africa (NPC), a non-pi-ofit company duly registered and incorporated under the laws of South Africa, which seeks to promote and protect the interests of the association and Its members while serving the needs of consumers, advertisers, and the public, and whose members provide media platforms across the entire spectrum of Out·of-home advertising services; 1.9. "Out-of-home advertising services" means out of home advertising services, which include but are not limited to outdoor advertising, rank advertising, programmatic digltal advertising, street fumlture1 and inamall advertising; 1.10. "Primedia Outdoor" means Primedia Outdoor, a division of Primedia Proprietary Limited, a private company duly registered and incorporated under Iha laws of South Africa, with its principal place of business situated at � Page2of8 � 15 Fredman Drive, Primedia Place, Sandown, Gauteng; 1.11. "Parties" means the Commission and Primedia Outdoor; 1.12. "Quallfylng SMMEs" means SMMEs with a total annual turnover not exceeding R5 million (five million Rand) and are owned by HDPs; 1.13. "Rate Card" means the monthly rate for the sites for the placement of advertisements; 1.14. "SMMEa" means small, medium and micro enterprises as defined in the Act; and 1.15. "Tribunal" means the Competition Tribunal of South Africa, a statutory body established in terms of section 26 of the Act, with its principal place of business at 1•t Floor, Mulayo Building (Block C), the DTI Campus, 77 Mein�ies Street, Sunnyside, Pretoria, Gauteng. 2. THE COMMISSI ON'S INVESTIGATION AND FINDINGS 2.1 On 04 December 2018, the Commissioner Initiated a complaint in terms of section 498(1) of the Act against OHMSA and all its members (�e Respondents") for the alleged contravention of section 4(1 )(b)(i). of the Act. This complaint was investigated under case number 2018Dec0062. 2.2 It was alleged that the Respondents, under the auspices of OHMSA, agreed to develop a Code of Practice and Standards (•Code of Practice") that fix payment and settlement terms, penalties and cancellation fees that they impose on advertising agencies, advertisers and Poster Buying Specialists that purchase advertising space from them. 2.3 The Commission Investigation found that from around September 2004 to about March 2018, OHMSA ,issued various versions of the Code of Practice for its members, recording the following agreements reached between the . l ���� � Page 3 of 8 'hh 2.3.1 They agreed that where an out-of-home media campaign Is cancelled by an advertiser or the advertising agency. a cancellation fee of 75% (seventy f1Ve per cent) of the balance of the contract is payable to the media owner. 2.3.2 They agreed that where illumination of a sign has been sub-standard for a month or part thereof. 25% (twenty five per cent) of the monthly rental fee is to be credited to the client or customer. 2.3.3 They agreed that where a client or advertising agency is responsible for supplying material for display on or In out-of-home media and delivered later than the date agreed. the media owner will be entitled to charge for the entire exposure period without compensation for late flighting. 2.3.4 They agreed that where campaigns run for 3 (three) months or less. a fee for the removal of faces or blanking of boards will be levied. This Is a fee for cleaning of the billboards. This means the advertising firm will be charged a fee to remove its advertised material from the boards. 2.4 The agreements recorded in the various versions of the Code of Practice constitute conduct amounting to fixing of prices and/or trading conditions Jn contravention of section 4(1 )(b )(0 of the Act. 2.5 The collusive agreements ended when OHMSA adopted a revised Code of Practice around March 2018. 3. ADMISSION OF LIABILITY 3.1. Primedia Outdoor does not admit liability In respect of the prohibited conduct described in paragraph 2 above. Page 4 of8 4. AGREEMENT REGARDING FUTURE CONDUCT 4.1. Primedia Outdoor agrees and undertakes to: 4.1.1 refrain from engaging in any conduct that may be in contravention of section 4(1)(b) of the Act, and from engaging in any prohibited practice in future; 4.1.2 prepare and circulate a statement summarising the content of this Consent Agreement to its employees, managers and directors within 30 (thirty) days of the date .of confirmation of this Consent Agreement as an order of the Tribunal; 4.1.3 develop, implement and monitor a competition law compliance programme as part of its corporate governance policy, which is designed to ensure that its employees, management, directors. and agents do not engage in future contraventions of the Act. In particular, such compliance programme should include mechanisms for the identification. prevention, detection and monitpring of any contravention of the Act; and 4.1.4 submit a copy of such compliance programme to the Commission within 60 (sixty) days of the date of confirmation of this Consent Agreement as an order by the Tribunal. 6. ADMINISTRATIVE PENAL TY 5.1. Primedia Outdoor agrees and undertakes to pay an administrative penalty in the amount of R2 717 950 (two million seven hundred and seventeen thousand nine hundred and fifty Randa). 5.2. Primedia Outdoor will pay the amount of the administrative penalty set out in paragraph 5.1 above to the Commission in 12 (twelve) equal instalments. the first instalment being paid within 7 (seven) Days of this Consent Agreement Page 5 of8 being confirmed as an order of the Tribunal and the remaining 11 (eleven) instalments by the last Day in each succeeding 11 (eleven) months. 5.3. The payment shall be made into the Commission's bank account, details of which are as follows: Bank name: Branch name: Absa Bank Pretoria Account holder: Competition Commission Fees Account Account number: 4087641778 Account type: Branch Coda: Reference: Current Account 632005 2018Dac0052/Prlmedia Outdoor 5.4. The penalty will then be paid over by the Commission to the National Revenue Fund In accordance with section 59(4) of the Act. 8. OTHER REMEDIES 6.1. Primedia Outdoor also agrees and undertakes to provide free Out-of-home advertising services to Qualifying SMMEs, to the value of R1 358 976 (One mllllon three hundred and fifty-eight thousand nine hundred and aeventy­ five randa), over a period of 12 (twelve) months commencing on the Day this Consent Agreement is confirmed as an order of the Tribunal. 6.2. Primedia Outdoor shall make an offer to 10 (ten) Qualifying SMMEs who may elect to accept the offer at no cost to themselves. Primedia Outdoor shall prepare and provide the list of the 10 (�n) Qualifying SMMEs to the Commission within 1 (one) month from the date of the confirmation of this Consent Agreement as an order of the Tribunal. 6.3: Each Qualifying SMME shall be allocated R135 897 (one hundred and thirty­ five thousand eight-hundred and ninety seven Rand) worth of free Out-of-home advertising services during the 12 (twelve) month period. Pago 6of8 \� � 6.4. Primedia Outdoor shall provide free Out-of-home advertising services to the 10 (ten) Qualifying SMMEs in the following manner: 6.4.1. The number and duration of advertising campaigns will be determined by the sites and advertisement display frequency chosen by each Qualifying SMME. 6.4.2. Primedia Outdoor will utilise its digital advertising and electronic billboards to display an advertisement. 6.4.3. The campaign will include designing and flighting the Qualifying SMME's advertisement. 6.4.4. The cost of the advertisement will be at Primedia Outdoor's current rate card. 7. MONITORING 7 .1. Primedia Outdoor undertakes to: 7 .1.1 in accordance with clause 6.2, provide the Commission with the details of the Qualifying SMMEs who have accepted Primedia Outdoor's offer; 7.1.2 report to the Commission on its compliance with this Consent Agreement every third month within the period commencing on the Day this Consent Agreement is confirmed as an order of the Tribunal and ending (i) 18 (eighteen) months thereafter or (ii) 3 three (months) after the value referred to in clause 6.1 is expended, ·whicliever·oceurs earlier; and 7 .1.3 provide such other information as the Commission may reasonably require in relation to the advertising campaigns. 7.2. Primedia Outdoor shall, in addition: 7.2.1 at all times, maintain an up to _date register, which shall be available for Inspection by the Commission; and Page7of8 � \tSb Pretoria 14th December • 7 .2.2 ensure the register contains information on each campaign that Primedia Outdoor has designed and flighted, including details of each of the 1 O (ten) Qualifying SMMEs, copies of the advertisements comprising each campaign, the number of advertisements flighted, and the Rand value for each campaign. 7.3. The Commission shall have the right to request any further Information that It determines is necessary from Primedia Outdoor concerning any aspect of these advertising campaigns. 8. FULL AND FINAL SETTLEMENT Upon confirmation as an order of the Tribunal, this Consent Agreement is entered into in full and final settlement and concludes all proceedings between the Commission and Primedia Outdoor relating to the conduct that Is the subject matter of the Commission Investigation under Case No. 2018Dec0052. For Primedia Outdoor D�ll8cl and· elgnad at Sw..,J � on Iha lb"'-day of �.f..12023 Chi Executive Officer, Primedia Proprietary Llmitad Name in Full: -:];�� ��1) For the Commission ______ on the __ day of _ _ __ _,2023 Comml88loner Page 8 of 8 1'11'