CAK now orders abolition of pacts fixing ads prices
Several advertising companies have been flagged by the competition watchdog for price-fixing as the segment topped the number of restrictive trade investigations in the last year.
The Competition Authority of Kenya (CAK) in its 2017-18 annual report says that members of the Advertising Practitioners Association (APA) were found to have signed an agreement on pitching costs, which exposed their clients to exploitation.
“The Authority also established that the Association had operationalised an MOU on pitching costs which amounted to the members agreeing on trading terms,” the CAK said in its report.
The firms were ordered to abolish the MOU’s and come up with a competition compliance programme for approval by the CAK.
Another trading body, the Outdoor Advertising Association of Kenya (OAAK), was also found to have fixed minimum prices for 12 by 10 metre billboards charged by its members for advertising services. The move earned OAAK member firm Tangerine a fine of Sh240,000 for its role while another, Ingenious Concepts Limited, is under investigation for a similar violation.
The firms contravened Section 22(1) (b) of the Competition Act that prohibits all agreements and concerted practices of associations which prevent, distort or lessen competition.
This is not the first time the CAK is penalising advertising firms for price-fixing. The regulator had in 2016 slapped eight companies under OAA with a Sh11.6m fine for similar violations.
The CAK had further ordered Magnate Ventures Limited to desist from similar malpractices in future.
The eight had agreed to fix Sh160,000 as the minimum monthly charge for 10 by 12 metre billboards in Nairobi.
Other firms found to have engaged in anti-competitive behaviour in the period include Kenya Breweries Ltd, Darling braid maker Style Industries Ltd and oil marketer Total Kenya.