AIP Legally Challenges Media Development and Diversity Agency (MDDA) and Competition Commission for Its Refusal to Support Publishers Impacted by Unfair Competition
The Association of Independent Publishers (AIP) have served legal papers on the Media Development and Diversity Agency (MDDA) and Competition Commission South Africa (CCSA) to review certain decisions by the CCSA and MDDA relating to, amongst other things, the criteria for funding of their Economic Development Fund (EDF) with a view to ensuring that the EDF benefits small, grassroots publishers who were the victims of unfair competition.
The EDF is a fund which was established by the CCSA and administered by the MDDA. In 2011, the Commission initiated an investigation into various large media companies. The investigation uncovered evidence that the latter, through the Media Credit Coordinators (MCC) had agreed to offer similar discounts and payment terms to accredited and non-accredited agencies that placed adverts with MCC members. The Commission found that the MCC was ultimately a pricing mechanism that breached the Competition Act, 1998. As a result of these investigations, the implicated companies were fined an amount of R39 million and the funds were housed in the EDF.
Over a number of years, the AIP and its members have met with the CCSA and the MDDA to plead that a substantive portion of the funds be set aside to directly assist independent publishers, who bore the brunt of the unfair competition. However, these pleas have fallen on deaf ears. The CCSA and MDDA have chosen instead to allocate the funds to other categories such as start-ups and students.
The MDDA released a document on 17 January 2022 that confirmed that the amount collected was R39 million but only a tiny portion of the Fund (R5.2 million) would be disbursed for sustainability projects that would assist surviving publishers.
At the end of January 2022, the MDDA sent out an advertisement calling for applications to the Fund, giving applicants only a single month to apply. The AIP immediately expressed its distress and met with both organisations to discuss the eligibility criteria again and, again, no progress was made.
A small glimmer of hope then appeared when the MDDA Board stated that they were happy to meet with the AIP Board on 22 April to discuss the matters. However, nothing came of the meeting. The AIP then decided to take the matter to court.
Chairperson of the AIP Board, Ms Mbali Dhlomo expressed her disappointment at the manner in which these two state organs have treated the AIP. She stated, “They have been playing a cat-and-mouse game with us for far too long now. We need a solution which will be beneficial to our members who bore the brunt of the unfair and anti-competitive behavior by the major media players between 2010 and 2015.
The community print media sector is made up of very committed publishers who have struggled for a number of years. It cannot be that when funds become available, only a fraction of these funds are allocated to the print media sector, and publishers have to apply to access them. They deserve better than what has been offered to them.”
ISSUED BY THE AIP BOARD
Kate Skinner – Executive Director – (082) 926-6404
Mbali Dhlomo – Chairperson of the AIP Board – (083) 466-0027