A local newspaper publisher today criticised the government’s competitions watchdog for refusing to investigate alleged predatory pricing by Trinity Mirror in a Birmingham newspaper war.
Chris Bullivant launched the paid-for Birmingham Press and Free Press weekly papers in spring 2010 but closed them in October that year with debts of more than £340,000 – including £37,000 owed to freelance journalists.
Bullivant claims he was forced to close the papers because Trinity Mirror had undercut his advertising rates with “predatory pricing” of just £250 for property pages in both its paid-for Birmingham Mail and free Mail Extra weekly titles.
Bullivant said this was £45 less than his “break-even” price of £295 for a page in the Free Press, and £140 less than the £390 charged for Mail property pages before the Press launched.
But after a long-running campaign by his lawyers to persuade the government’s competition watchdog to look into his claims, Bullivant was told there would be no investigation.
Bullivant, who is still a director of Bullivant Media Ltd, publishers of the Coventry Observer and a dozen other Midlands weeklies and magazines, said: “I understood from previous competitions watchdog guidance that it would be illegal to engage in predatory pricing battles.
“But I believe Trinity Mirror made loss leaders of the Mail’s property pages to ensure estate agents did not advertise in the Press.
“I provided full details of this alleged anti-competitiveness to the government and, interestingly, now understand that Trinity Mirror’s advertising prices have returned to what they were before the Press launched.”
In letters seen by Press Gazette, the Office of Fair Trading told Bullivant it had decided not to investigate because of “administrative priorities” and because such an investigation would be “resource intensive” and “unlikely to generate significant benefits for consumers”.
Bullivant said: “This is outrageously unfair, as the Press affected hundreds of thousands of consumers – Birmingham readers and advertisers. Many contractors, journalists and me, the publisher, all lost money when it closed.
“I believe the government’s non-decision means Trinity Mirror and other big publishers can get away with anti-competitive practices, using predatory pricing to undercut new competition, which I claim is an abuse of their dominant position.
“An investigation might find in my favour, but would at least define the rules for future competition between big publishers and local entrepreneurs.
“As it is, entrepreneurs will find it impossible to get financial backing for newspaper launches in metropolitan areas because of predatory pricing, and are therefore being unfairly excluded by big publishers.
“When I launched the Press, I always said that if it failed it would be my Waterloo, but I did not know the opposition would have Challenger tanks at their disposal – courtesy of the government’s inaction.”
Bullivant’s lawyers asked the OFT to investigate the alleged ‘exclusionary conduct’ under the Chapter II prohibitions of the Competition Act 1998, and under Article 102 of the Treaty on the Functioning of the European Union.
Michael Rosen, a media relations officer at the government’s Competition and Markets Authority – which has recently replaced the OFT – said: “We are unable to comment on OFT decisions, but if new evidence is brought to light we will, of course, consider it.”
Rupert Smith, head of communications for Trinity Mirror, said: “We're not making any comment.”
Steve Dyson is a former editor of the Trinity Mirror-owned Birmingham Mail and now runs Dyson Media, a training company and media consultancy.
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