THEE - The Competition Commission - Commission refers predatory pricing case
JSE
THEE
THEE - The Competition Commission - Commission refers predatory pricing case
against Media 24
MEDIA RELEASE
31 October 2011
Commission refers predatory pricing case against Media 24
The Commission has today referred a case of predatory pricing against Media 24
to the Competition Tribunal for adjudication. This relates to advertising rates
charged by Media24 in the community newspaper market in the Goldfields region of
the Free State.
The Competition Act prohibits predatory pricing which involves pricing below
average or variable costs in order to exclude competitors in a market.
This referral follows a complaint that was lodged by Berkina Twintig (Pty) Ltd
trading as Gold-Net News on 30 January 2009, in which it alleged that Media 24
engaged in predatory pricing, which resulted in Gold-Net News exiting from the
market in 2009.
It was alleged that the anti-competitive pricing occurred during the period from
January 2004 until February 2009.
During this period Media 24 operated two community newspapers, namely Vista and
Goudveld Forum in the Goldfields area.
The Commission`s investigation found that Media24 engaged in exclusionary
pricing conduct through Goudveld Forum whereby its advertising rates were
priced below cost. It further, found that this was intended to exclude
competitors and to bolster Media24`s reputation as an aggressive competitor
in order to reduce the likelihood of future entry into the community newspaper
market. The Commission concluded that Goudveld Forum was used as a fighting
brand to prevent competition with Media24`s larger and more lucrative title,
Vista.
Evidence before the Commission reveals that Goudveld Forum budgeted for and
operated at a loss over this period and was closed down in January 2010 after
Gold-Net News had been driven out of the market.
The Commission has asked the Tribunal to levy an administrative penalty of 10
percent on Media 24`s turnover.
ENDS
Further info:
Keitumetse Letebele, Head of Communication
012 394 3183 / 082 783 3397 / keitumetsel@compcom.co.za
Molebogeng Taunyane, Coordinator: External Communications
012 394 3289/082 646 8663/molebogengt@compcom.co.za
Date: 31/10/2011 15:13:44 Produced by the JSE SENS Department.
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