DGMT handed £1m predatory price fine

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The Independent Online

An appeal tribunal yesterday upheld a ruling that an Aberdeen newspaper group owned by Daily Mail & General Trust had abused its dominant market position and a £1m fine was imposed on the company.

The fine was a reduction on the £1.3m penalty originally levied by the Office of Fair Trading in the case in July 2001. However, yesterday's finding by the Competition Appeal Tribunal was taken as an important vindication of its position by the OFT and a significant instance in establishing a case history for a breach of the 1998 Competition Act.

Since 2001, DMGT has fought the OFT's finding against its Aberdeen Journals business, taking it to the Appeal Tribunal. DMGT can still make a further appeal, to the Court of Session.

The OFT was brought in to investigate after a free weekly newspaper called the Aberdeen & District Independent complained that its DMGT-owned rival, the Aberdeen Herald & Post, was selling advertising space at a price that "deliberately incurred losses... in an attempt to protect the position of its own newspapers".

The predatory pricing started in response to the launch of the Aberdeen & District Independent in 1996 and continued after the Competition Act came into force on 1 March 2000. The OFT decided that Aberdeen Journals had infringed the Competition Act's Chapter II prohibition, which makes the abuse of a dominant position unlawful.

The fine was reduced by the Tribunal in recognition of the fact that the abuse continued only until the end March 2000 - just one month under the new law.