Politics: Murdoch predatory pricing unscathed by Bill, says QC

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The Independent Online
GOVERNMENT plans to tighten up competition law will not prevent newspaper price cutting by Rupert Murdoch, a legal opinion obtained by Independent Newspapers shows.

The opinion, commissioned from a leading competition lawyer by the owners of The Independent, will be rejected today by the Government. It says its lawyers have a different view.

The issue will be decided today during the committee stage of the Competition Bill in the House of Commons.

The Government will seek to overturn a House of Lords amendment designed to stop predatory pricing by Mr Murdoch's newspaper The Times.

Ministers have asserted that the new clause 19, which would prohibit abuse of a dominant position in circumstances which might reduce the diversity of the press, is "unnecessary and unworkable".

They want to remove it from the bill, claiming that other measures contained in the legislation will regulate newspaper pricing.

However, an opinion from Richard Fowler QC for the owners of The Independent says the measures in the bill would have to be modified if they were to help address newspaper pricing.

Mr Murdoch sells The Times for 30 pence on weekdays, considerably less than any other broadsheet newspaper. At one point the paper sold for 10 pence on Mondays. Brendan Hopkins, managing director of Independent Newspapers, said: "This opinion is quite categoric in its rejection of the Government view that the amendment was 'unnecessary and unworkable'. "The Government's position on Clause 19 is now untenable and I look forward to it honouring pledges it made in opposition to act against predatory newspaper pricing."

However, the Department of Trade and Industry said its own legal opinion showed the opposite.

It believed European case law showed that where prices were below the average cost of production, they should be assumed to be predatory. No proof of intent is needed, a spokesman said.

"We believe that the abuse of dominance such as predatory pricing should be stamped out whatever the market," he said.

In a letter to David Chidgey, the Liberal Democrat spokesman for trade and industry, the minister of state Ian McCartney said the Government's advice was confidential.

Last night Mr Chidgey said he would be happy to assist in drawing up a workable amendment.

"However, I fear that the Government's real opinion is that the amendment is politically undesirable, rather than practically unworkable," he said.

"The Government must stop pandering to powerful media moguls and stand up for the continuing freedom and diversity of the British press."