OFT fines Daily Mail group £1.33m for market abuse

Daily Mail and General Trust's chances of making a successful bid for The Herald newspaper have been damaged after its Aberdeen Journals subsidiary was found guilty, for the second time, of abusing a dominant market position and fined £1.33m.

The Office of Fair Trading imposed the penalty yesterday despite an earlier fine from the watchdog for the same offence being overturned earlier this year by the Competition Commission. The OFT had another look at the evidence and once again found Aberdeen Journals guilty of predatory pricing by "deliberately incurring losses" when selling advertising space in its free weekly, the Aberdeen Citizen, in an attempt to "remove" its rival, the Aberdeen & District Independent.

The Herald, based in Glasgow, has been put up for sale by SMG which is seeking £200m for the daily title. DMGT is thought to be lining up a bid. However, given DMGT's major position in the UK newspaper market, its bid would automatically be referred to the Competition Commission. Experts said yesterday that the behaviour of Aberdeen Journals could weigh against DMGT's bid for The Herald, when it comes to be considered by the commission.

Mark Jones, a competition lawyer at Norton Rose, said: "I would not be at all surprised if the Competition Commission takes this into account in its overall assessment [of an DMGT bid]. The authorities become concerned where there is a track record of pricing to close down rivals."