Billing the Billboard Bosses

The Kenyan antitrust authority, CAK, recently closed its investigation into a classic price-fixing cartel involving the Outdoor Advertisers Association, resulting in a fine of Sh11.64 million (approx. $120,000) imposed on domestic advertising firms for fixing minimum prices of billboard space, reports the Kenya Gazette.  The affected companies include Magnate Ventures Limited (Sh5 million), A1 Outdoor Limited (Sh114,000), Live Ad Limited (Sh2.5 million) and Adsite Limited (Sh2.39 million), while four others had already settled with CAK previously (Consumer Link (Sh1.2 million), Look Media (Sh136,000), Firm Bridge Limited (Sh246,400) and Spellman Walkers Limited (Sh45,180)).  The remaining four trade association members will be fined forthwith.

Notes Andreas Stargard, a competition practitioner with Primerio Ltd., “[i]n this case — which really represents a classic minimum-price fixing arrangement among trade association members — the billboard owners agreed during a period of less than one year to set a minimum monthly price of Sh160,000 in large Kenyan markets, such as Nairobi.  Interestingly, they price-discriminated geographically within their cartel arrangement and fixed the corresponding fees in smaller markets at a slightly lower amount.”

“It is interesting to see that the CAK has  already followed up on this matter and has noticed an arguably direct empirical result, yielding a beneficial effect of a not insignificant price reduction in advertising costs in Nairobi.”