Competition Tribunal: Media24 finding

The Competition Tribunal has heard testimony from a former Media24 manager on its strategies to force competitors in the community newspaper market out of business, Business Day reported yesterday.

Former senior manager responsible for community newspapers at Die Volksblad in the Free State, Wian Bonthuyzen said on Tuesday the strategy was deliberately aimed at undercutting opponents on advertising tariffs until they could no longer sustain their loses.

The newspaper reported that this eventually led to the demise of its fiercest competitor in the Goldfields area, Gold-Net News, in 2009.

Gold-Net complained about the conduct between 2004 and 2009 to the Competition Commission, which found that Media24 engaged in predatory pricing, charging prices below average variable costs.

Media24 had denied the allegations and is defending itself before the tribunal.

Bonthuyzen was subpoenaed by the commission to appear before the tribunal after he became reluctant to give evidence although he was helping the commission with the investigation.

The commission found that Media24 used Goudveld Forum, a loss-making community newspaper in the goldfields area, as a "fighting brand" to undercut Gold-Net News on its advertising rates, causing it to suffer continued financial losses.

Source: Sapa, via I-Net Bridge