THE Competition Authority ruling that Independent Newspapers abused a dominant position when it bought 25 per cent of the Irish Press in December 1994 has been challenged by IBEC. The Irish Press newspapers collapsed in May 1995, following the investment by Independent Newspapers at the end of the previous year.

The IBEC Competition Council yesterday published its views on the Competition Authority's Study of the Newspaper Industry, which included the Independent Newspapers acquisition. The Council said that it did not consider that the authority provided sufficient evidence in its published report to support the conclusion that the Independent Group was in a dominant position as defined by law at the time of the report.

"The question which had to be addressed was whether they held a position which allowed them to operate independently of their customers and their competition," according to the council.

State intervention in the newspaper market as a result of Independent Newspapers' actions was unnecessary as the lack of significant barriers to entry meant that the "market will provide a solution if there is lack of competition," according to IBEC.

The Minister for Enterprise and Employment, Mr Bruton, has yet to take any action on the Competition Authority report, which he received last April. He was not available for comment last night. Independent Newspapers is considering supporting a relaunch of the three Irish Press titles, in which it retains a 25 per cent stake.

Independent Newspapers is a member of IBEC, as are The Irish Times Ltd and the Cork Examiner group. None of the newspaper companies is represented on the Competition Council which is made up of 40 IBEC members, including a number of law firms.

Yesterday's report was the first published by the council which reviewed a specific decision by the Competition Authority concerning an IBEC member. However, the secretary of the council, Mr Myles O'Reilly, pointed out that the Competition Authority study was also the first of its type. All but one of the members, who abstained, voted in favour of publishing the review, said Mr O'Reilly.

The council goes on in its review to make the point: "Ireland needs to develop large Irish companies which are capable of competing in European and other world markets and that there should not be regulatory or other barriers to the development of such enterprises in Ireland".

Such a policy is not incompatible with the need for small and medium-sized business which are capable of developing beyond their current size, claims the council.