OFT Fines DMGT Offshoot £1.3m for Predatory Pricing

17 July 2001

The Office of Fair Trading yesterday imposed a £1.3 million fine on Aberdeen Journals, a regional newspaper group owned by the Daily Mail & General Trust.

The fine was levied in punishment for predatory pricing by the group’s free newspaper Herald & Post. This was aimed at driving a rival freesheet – the Aberdeen & District Independent – out of business. According to the OFT, the anti-competitive behaviour started in 1996 with the Independent’s launch and involved the Herald & Post’s advertising rate card, the scale of its free distribution and the number of pages printed.

These trading practices incurred losses, said the OFT, "in an attempt to expel the Independent, its only rival, from the market". OFT director general John Vickers yesterday described the case as “a serious infringement" of the Competition Act, noting that even with an OFT investigation under way, the Herald & Post’s behaviour remained anti-competitive despite the enactment of the Competition Act last year.

The penalty – equivalent to four per cent of Aberdeen Journals’ annual turnover of £33.9m – had been set to act as an adequate deterrent, said Vickers, although the group could have been fined up to 10%.

DMGT said it would appeal both the decision and fine.

News source: The Times (London)