Letter: Effect of predatory pricing on business and consumers

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The Independent Online
Sir: The Government seems to have a very ambivalent, if not hypocritical, attitude towards cross-subsidisation within business. The Department of Transport would not allow cross-subsidies between British Rail's businesses (pre-Railways Act), such as InterCity and Railfreight. So rigidly was the policy applied that cross-subsidies were not even allowed between the various Railfreight sectors, where the need to break into new markets was, and still is, essential.

This attitude must be contrasted with the relaxed position taken towards one of Rupert Murdoch's businesses - Sky Television. Exclusive rights to major sporting events have been bought with moneys made available by cross-subsidy. Mr Murdoch would doubtlessly argue the right to invest in such a way in order to break into the market - fortuitous indeed that the Government has also been holding down BBC funding.

The decision by the Office of Fair Trading on the aggressive, if not predatory, pricing of the Times confirms the Government's acceptance of cross-subsidisation as a valid option within a business empire, notwithstanding the fact that this clearly favours the financially powerful, and puts smaller competitors, where the option is unavailable, at a distinct disadvantage.

The Times is not attempting to break into a new market. It is straightforwardly pursuing profit by attempting to eliminate elements of the competition where the financial backing is smaller. With the seemingly limitless resources of the Murdoch business empire behind it, the Times has the capacity to succeed in its war of financial attrition. Wouldn't such a success be another of capitalism's unacceptable faces, or is size the only thing that matters after all?

Yours faithfully,

DAVID MOORE

Biddulph,

Staffordshire

25 June

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