Outlook: Ducking the important competition issues

This is a self-interested piece of commentary, admittedly, but it is also one with a wider significance for business and the way it is regulated. One of our competitors, The Times, is next month planning to cut the cover price of its Saturday edition to 10p a copy. There is also some talk of it doing the same to its Thursday edition. At this stage it is not clear whether this is being considered as a one-off, promotional offer, or as a more permanent thing.

If the latter, it will mark a significant escalation in the broadsheet newspaper price war which has been raging for the past three years. The Times already charges just 10p for its Monday edition and sells at a significant discount to its main rivals throughout the rest of the week.

Rupert Murdoch, proprietor of The Times, has consistently presented his price cutting strategy as part of a long-term commercial endeavour to lift the newspaper's circulation and thereby its profitability. His main target is the market leader, The Daily Telegraph, and in pursuing his quarry, he has spent and continues to spend a small fortune.

On a number of occasions Mr Murdoch has also expressed the view that there are too many national newspapers in Britain. A subsidiary aim must, therefore, be to bring about the closure of a competitor. However, Mr Murdoch has never publicly stated this aim as such. To do so would be to invite action by the competition authorities. As things stand it is next to impossible to bring an action for "predatory pricing" unless it can be shown that the aim is to force competitors out of business. Plainly, it is therefore also next to impossible unless the predator admits to this purpose.

Why does predatory pricing matter? If it brings about lower prices for consumers, then it might be thought of as positively a good thing. That a company is pricing in an anti-competitive fashion is not just notoriously difficult to prove, it is also sometimes hard to argue that there is anything fundamentally wrong with it. In the end, however, diversity of choice is the best and only reliable way of safeguarding consumer and other public interests. It is part of the function of any government to ensure that this variety of choice is preserved and developed, for it is in diversity and the innovation that flows from it that we find the greatest chance of economic success for all.

This is particularly important in newspapers and broadcasting, because diversity of opinion, information and reporting is such a fundamental part of the democratic process. But the same arguments also apply to other industries from supermarkets to banks, and from software providers to metal bashers where big companies use their greater clout and spending power to undermine and crush smaller competitors. Anti-competitive pricing can ultimately prove as damaging to the public interest as an anti-competitive merger.

When in opposition, a number of prominent members of the present Cabinet backed the case for strengthening the law so as to make predatory pricing an easier thing to prove. Since being elected, they have been strangely silent on the matter. The Government's new Competition Bill has failed adequately to address this vital area of competition law and although several amendments have been tabled that would bring the bill into line with the tougher competition practice of the US and Australia, the Government shows no sign of accepting them.

Nor has Margaret Beckett, President of the Board of Trade, or any other DTI minister, so far given an adequate explanation of why not. But then it was Mr Murdoch's Sun wot won it for them, wasn't it? Most people will draw their own conclusions.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously

Illnesses, car crashes and suicides

Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously
Srebrenica 20 years after the genocide: Why the survivors need closure

Bosnia's genocide, 20 years on

No-one is admitting where the bodies are buried - literally and metaphorically
How Comic-Con can make or break a movie: From Batman vs Superman to Star Wars: Episode VII

Power of the geek Gods

Each year at Comic-Con in San Diego, Hollywood bosses nervously present blockbusters to the hallowed crowd. It can make or break a movie
What do strawberries and cream have to do with tennis?

Perfect match

What do strawberries and cream have to do with tennis?
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Wimbledon 2015: Team Murray firing on all cylinders for SW19 title assault

Team Murray firing on all cylinders for title assault

Coaches Amélie Mauresmo and Jonas Bjorkman aiming to make Scot Wimbledon champion again
Wimbledon 2015: Nick Bollettieri - Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!

Nick Bollettieri's Wimbledon Files

Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!
Ashes 2015: Angus Fraser's top 10 moments from previous series'

Angus Fraser's top 10 Ashes moments

He played in five series against Australia and covered more as a newspaper correspondent. From Waugh to Warne and Hick to Headley, here are his highlights
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high