Government To Vote On Predatory Pricing

The Government is to vote today on whether to accept the Clause 19 amendment to the Competition Bill which has been proposed by the Liberal Democrats and peer, Lord McNally (see Lords Revolt In Favour Of Curbing Newspaper Price Cuts).

The proposals have been drafted in order to prevent the ‘abuse of a dominant market position’ by using newspaper predatory pricing in order to eliminate competition. The move is primarily directed at Rupert Murdoch’s Times newspaper which is currently being sold for 30p on weekdays; this is significantly cheaper than any of the other broadsheets.

The Government is set to oppose the amendment and is claiming that it is ‘unworkable and unnecessary’. It says that other legislation in the Competition Bill will regulate pricing effectively.

David Chidgey MP, Liberal Democrat Trade and Industry Spokesman, says: “If the Government really believes that the amendment is ‘unworkable’ then I am sure that Members from all sides of the House would be willing to assist the Government in formulating a ‘workable’ amendment along similar lines. However I fear that the Government’s real opinion is that the amendment is politically undesirable, rather than practically unworkable.”

He goes on to say that Clause 60, which was introduced to the Competition Bill to allow the use of European jurisprudence (see Beckett Reassures Of Tighter Restrictions To Predatory Pricing), is too vague to be effective. Furthermore, opinion from Richard Fowler QC given to Independent Newspapers, says that the measures need to be modified in order to restrict predatory pricing. Fowler goes on to say that The Times would not even be affected by Clause 19 as it does not currently hold a dominant market position. The Liberal Democrats believe this strengthens the need for the amendment in order to curb the leeway for dominance.

Chidgey says: “The Government must stop pandering to powerful media moguls and stand up for the continuing freedom and diversity of the British press.”

Liberal Democrats: 0171 222 7999 News International: 0171 782 6000