THE COMPETITION Commission, which has been dragged into a battle between the print and advertising industries, is investigating whether or not publishers that are members of the Audit Bureau of Circulation (ABC) have been contravening the Competition Act, writes Ann Crotty in Business Report.
At the centre of hostilities is the ABC's "50 percent" rule, which states that only newspapers sold at 50 percent or more of the cover price can be included in circulation figures.
Nandi Mokoena, the manager for strategy and stakeholder relations at the commission, said yesterday that the investigation was initiated following concerns that were raised early last year by a publisher. She could not say when the investigation would be completed.
The concerned publisher, whom industry sources say is Avusa, had apparently argued that the 50 percent rule implemented by the ABC discouraged publishers from pricing as low as they would like to and was therefore anti-competitive.
Although the commission has not yet completed its investigation, the ABC has changed the rule with effect from this month. The change implies that newspapers "sold" at as little as 1 percent of their cover price are now included in the ABC's circulation figures.
Publishing companies are arguing that the change is of little significance, while advertisers contend the opposite.
These differences reflect the ongoing tensions between publishers and advertisers. In general publishers are intent on boosting circulation figures in order to increase their advertising rates while it is in the interests of advertisers to keep circulation figures as tight as possible so that they pay less for advertising.
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