Outlook: Keeping the monopolists in check

AS A businessman, Rupert Murdoch is much admired, and deservedly so in many respects. He's both innovative and adventurous, and he has a buccaneering approach to business risk which is sadly lacking in the grey, cautious world inhabited by most of our major corporations. If you don't take the risk, you don't get the reward, is his philosophy, and it's a good one.

But he's also a monopolist, and it is in Britain that he has learned and honed his skills in cornering the market. This is partly because Britain is where Mr Murdoch started out as a serious media tycoon; Britain was the first big market place in which he was able to apply his predatory instincts.

In equal measure, however, it is because British competition law, and the regulators and politicians that enforce it, have been wholly unequal to the task of curbing him. With the ballot box in mind, they may even have encouraged him.

The tide may now be turning, albeit not as rapidly or decisively as it might do. Last month the Government blocked Mr Murdoch's BSkyB from buying Manchester United after a Monopolies and Mergers Commission investigation which adopted an overtly hostile approach to the monopoly of pay TV enjoyed by Mr Murdoch. And yesterday, the director general of fair trading, John Bridgeman, found strongly against News International's price-cutting strategy at the Times.

News International deliberately set out to lose money on the Times for a period of eighteen months, Mr Bridgeman has found, though he stops short of agreeing with complainants that this amounted to "predatory pricing". According to the OFT's definition, a loss making strategy only becomes "predatory" if aimed at eliminating a specific competitor.

In all probability, this was and still is Mr Murdoch's intention. He's certainly come close enough to saying it on a number of occasions with his view that the national daily newspaper market in Britain will eventually be reduced to just three or four titles - two of which will be his. But there's no hard evidence of it. Mr Murdoch is not so stupid as to leave finger prints.

Even so, the OFT seems to have gone as far as it reasonably can under the present unsatisfactory legal setup in addressing Mr Murdoch's anticompetitive pricing practices. News International is having to give wide-ranging undertakings on future pricing strategy to avoid a full Competition Commission probe.

In some respects, it is a strange kind of competition policy which prevents companies from reducing their prices. However, there's plainly a different dimension when the purpose is to keep prices low for only as long as it takes to destroy the competition. As it happens, Mr Murdoch has failed in this objective, but he has inflicted financial injury.

Under the law as it stands, there are few avenues of redress. Mr Bridgeman would not have been able to fine News International even if he had found against it under his own definition of predatory pricing. That position changes with the new Competition Act, which has a catch all clause against abuse of a dominant market position and allows for heavy fines. This would have provided the ammunition required both for the regulator to fine Mr Murdoch and for aggrieved parties to sue him for the mayhem he's caused. Unfortunately, it doesn't take force until March next year.

None the less, things do finally seem to be moving in the right direction. News International's chairman, Les Hinton, says that complaining is what his competitors do best. "We prefer to meet them in the market place, they prefer to meet us in the regulatory arena", he says. Were this comment in any way original, it would at least have the merit of being quite clever. In fact it is the time honoured riposte of monopolists down the ages, last used by Microsoft in its anti trust battle with the US Justice Department.

The market place can only truly serve the general interest if competition reigns supreme. One of the reasons why Britain has high prices, poor consumer choice, and has failed to realise its full economic potential is that it has allowed anti-competitive practice to flourish. With luck, this is going to change.