The Competition Commission has confirmed that it is investigating Avusa and Media24 for alleged price fixing and abuse of dominance in the print media industry.
The Parliamentary Indaba on Transformation and Diversity of Print Media, held on September 22 and 23 2011, was attended by various industry associations, lobby groups and small commercial and community media representatives, as well as organs of state, including the commission.
At the start of the indaba it emerged that two of the country's biggest media houses, Media24 and Avusa, are under investigation by the commission for anti-competitive conduct. Hardin Ratshisusu of the commission confirmed that it is examining predatory pricing allegations against Media24 and Avusa. 'Predatory pricing' refers to conduct in which a dominant firm sets its prices below cost so that it can entice customers away from its competitors and force them out of the market. After the exit of the competitors, the dominant player would increase its prices to recoup its losses incurred through the predatory pricing strategy.
The Parliamentary Communications Committee called on the commission to prioritise an investigation into possible anti-competitive behaviour in the print media industry and the entire value chain. It remains to be seen whether the commission will refer these complaint investigations to the Competition Tribunal for adjudication.
For further information on this topic please contact Daryl Dingley at Webber Wentzel by telephone (+27 11 530 5000), fax (+27 11 530 5111) or email ([email protected]).