Northcliffe hit for £1.3m as unfair pricing fine is upheld

Independent’s Robins said Northcliffe "got what they deserved"

The Office of Fair Trading’s decision to confirm its £1.3m fine on Northcliffe Newspapers for predatory pricing by Aberdeen Journals has brought a sharp reaction from the newspaper on the receiving end of its market abuse.

Paul Robins, managing director of the Aberdeen & District Independent, told Press Gazette: "They got what they deserved. I’m pleased that the OFT has upheld the substance of the original decision because I think if it had let them off the hook it would have sent out the wrong message – that big groups can squash little flies like us. Hopefully that will be the end of it."

But Northcliffe said it was considering whether to appeal after a detailed reading of the OFT report.

The free weekly Independent originally laid its complaint in September 1996. It claimed Aberdeen Journals was acting unlawfully by under-pricing advertisements in its free Aberdeen Herald and Post and requiring advertisers not to use the Independent.

In 1999, Aberdeen Journals was again caught abusing its dominant market position. It was saved from a Competition Commission reference by giving an assurance to the OFT that it would discontinue its practices.

More breaches led to the OFT fine £1.328m in 2001 on Northcliffe Newspapers, part of the Daily Mail and General Trust.

But when Northcliffe went to the Competition Commission appeal tribunal, the fine was set aside in 2002 and the OFT was asked to reconsider the definition of the product market on which it had made its ruling.

The OFT’s further analysis confirmed its original finding that Aberdeen Journals was dominant in the market and had incurred losses when selling advertising in the Herald and Post in an attempt to expel the Independent.

OFT director John Vickers said: "Aberdeen Journals deliberately incurred losses in a persistent campaign to remove its only direct rival from the market. This campaign continued despite the fact that the Competition Act 1998 prohibited predatory pricing from March 2000 and despite the OFT investigation already being in train.

"This was a serious infringement of the law and the penalty should act as a deterrent to others," he said.

In 1999, Community Media, now part of Archant Regional, had to give assurances to the OFT about similar trading practices that were being used by the Weston Super Mare Admag and the Weston & Somerset Mercury.

lThe Independent has entered into an advertising alliance with three Archant paid-for weeklies in north-east Scotland. Ads will be sold through the Independent into the Buchan Observer, Fraserburgh Herald and Ellon Times.

By Jean Morgan

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