Local newspaper fight over price fixing ends up in Constitutional Court

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In a judgment that divided the justices of the Constitutional Court, a complaint against Media24 for alleged predatory price-fixing has been dismissed.

In the court’s ruling on Wednesday, Justice Leona Theron detailed the lengthy history of the complaint against the media giant.

The media company was accused of predatory price-fixing and essentially forcing other local Welkom newspapers out of business through the manipulation of advertising costs.

The initial complaint was lodged against Media24 at the Competition Commission by a competitor, Gold-Net News.

Between 1999 and 2009, Media24 was running two newspapers in the Welkom area, Vista and Forum. While Media24 was the dominant news force in the area, it was estimated that Gold-Net News catered to about a quarter of the market.

All three newspapers were distributed for free and sustained themselves financially by selling space to advertisers. However, between 2004 and 2009, Media24 cut the rates for advertisers wishing to advertise in Forum.

In its arguments at the Competition Commission, Gold-Net News insisted that the prices were so low that they amounted to pricing below the cost of producing the paper.

In January 2009, Gold-Net News was forced to shut down, as it could no longer compete with the low prices charged by Media24. Nine months later, Media24 shut down Forum, leaving Vista as the sole remaining local newspaper.