A man who set up two free newspapers in but went bankrupt has lost an appeal against a decision by the Office of Fair Trading that Newsquest and Johnston Press had not breached competition law to force him out of the market.

Terry Brannigan established two free local newspapers, Lewes Life in Lewes, East Sussex, and Uckfield Life in nearby Uckfield, both of which depended on advertising revenues.

Newsquest and Johnston Press both publish paid-for newspapers in East Sussex.

Brannigan complained to the OFT that a few months after he launched his papers, Newsquest also launched a free weekly newspaper in Uckfield.

Brannigan subsequently ran into serious financial difficulties and was declared bankrupt.

He complained to the OFT that Newsquest and Johnston Press had forced him out of the market after engaging in anti-competitive conduct and exclusionary practices in breach of the prohibitions imposed by sections 2 and 18 of the Competition Act 1998.

In his complaints he had alleged that Newsquest’s free paper was used as a “fighting title” to defend the revenue of its paid-for titles against competition from him.

He also alleged that Newsquest only retaliated against his Uckfield paper because it and Johnston Press had a tacit agreement that neither would produce a free paper in the Lewes area. He alleged that there were a number of other abuses, including Newsquest having offered below-cost rates to advertisers if they promised not to advertise in his newspapers.

Brannigan submitted that in finding that there was no infringement, the OFT had failed to provide him with an opportunity to submit comments before adopting its decision, which was contrary to its own procedural rules; erred in its definition of the relevant geographic market, and should have considered Lewes and Uckfield as the relevant local markets; erred in concluding that Newsquest and Johnston Press were neither individually nor collectively dominant in the area, and in finding that the practices complained of were not abuses of a dominant position contrary to the Chapter II prohibition under section 18 of the Competition Act; and, finally, was wrong to conclude that Newsquest and Johnston Press had not entered into any anti-competitive agreements in breach of the Chapter I prohibition in section 2 of the Act.

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