Peers set to rebel on press price law

THE Government may be defeated in the Lords tomorrow on a move to outlaw predatory pricing in the newspaper industry, writes Paul Routledge.

Lord McNally, the Liberal Democrat peer, said yesterday that if special competition rules were not introduced to end newspaper price wars, then one or even two newspaper groups could disappear.

"My hope of winning the vote is increasing," he said last night. "I am very encouraged by expressions of support from the Labour benches. We have a very good chance of winning."

A number of Labour peers have promised to back an amendment tabled by Lord McNally and Viscount Astor to the Government's Competition Bill. The amendment would outlaw conduct by one or more national newspapers that "amounts to an abuse of dominant position" if it would reduce the diversity of the press. Abuse is defined as "imposing selling prices below marginal cost of production on a persistent basis".

The Government opposes the move, on the grounds that its Bill will prohibit all predatory pricing, and newspapers cannot be singled out as a special case for tougher rules. It would also be contrary to the harmonisation of UK competition law with the European Union.

Lord McNally said: "The amendment is purposely modelled on US legislation. Why does Mr Murdoch not engage in predatory pricing in the United States, or in his native Australia? The answer is that legislation like this is in place.

"I want the legislation to direct the Director-General of Fair Trading to take action before there are casualties, because I firmly predict that if we don't tighten up the law and end the present anarchy in the print media we will have certainly one and perhaps two major casualties."

The papers most targeted by the predatory pricing policies of Rupert Murdoch's News International, publishers of the Times and the Sunday Times, are The Independent and Independent on Sunday and the Daily and Sunday Telegraphs.