Newspaper is cleared of below-cost selling

The Drogheda Independent group has been cleared by the Competition Authority of engaging in below-cost selling.

The authority began an investigation after a complaint was received from the publishers of the Drogheda Leader, a rival newspaper. The Drogheda Independent group is owned by Independent News and Media.

The Drogheda Leader claimed the Independent group was abusing a dominant position by: launching the Drogheda Independent Weekend Extra in 1997; selling advertising below cost since 1997; and selectively discounting the price of advertising in the Extra during January and February 2003.

The Authority rejected these allegations, saying the Drogheda Independent Group was not dominant and "even if it were dominant, its alleged conduct could not constitute an abuse".

"The alleged conduct is arguably pro-consumer and more indicative of intense competition in the market than predatory conduct by a dominant undertaking," it said.

The Authority acknowledged the Drogheda Independent did control 65 to 75 per cent of its local market, but this was not necessarily a problem.

"Low barriers to entry and expansion, low customer switching costs, and the relative size of its rival, the Drogheda Leader, appear to constrain the ability of the company to profitably raise the price of advertising in its newspapers.

"Consumers and customers have benefited due to an increase in choice and quality of newspapers available in the Drogheda area that have arisen as a direct result of intense competition between the competitors in the relevant market," it added.