On a day when Jill Dando’s murder and President Clinton’s U-turn on
ground troops in Kosovo dominated newspaper front pages, an Office of
Fair Trading ruling on something that arguably ceased to be an issue 18
months ago hardly seemed like headline news.
But then, this was news about newspapers and there’s nothing like an
opportunity for a bit of self-analysis or back-patting to get editors
clearing the decks to air their views.
So it was that The Independent’s Saturday edition carried the headline
’Defeat for Murdoch, victory for press freedom’ across the top of its
The issue under OFT investigation was price cutting in the national
newspaper market and News International’s pricing strategy for The Times
Remember 1993 when Rupert Murdoch first slashed the price of The
Doom and gloom were forecast for The Independent, while The Telegraph’s
million-plus sales were also under attack. Rivals leapt in to accuse
Murdoch of predatory pricing, of deliberately making a loss on The Times
in a bid to damage other papers in the market.
While readers enjoyed sampling the low-price edition, critics said that
the Murdoch strategy threatened the very heart of the British press and
risked stripping the nation of one of the world’s most vibrant newspaper
Of course, this hasn’t actually happened. The Times saw its circulation
double, The Independent grew weaker (though the paper’s unfocused
editorial didn’t help), The Telegraph kept its head above the one
million mark and, after successive price-cutting strategies, the price
of The Times crept up to 30p at the beginning of 1998. It has stayed
there ever since.
Even so, rival papers will be relieved that the OFT has ruled that if
News International wishes to make any future price cuts, it must first
obtain OFT approval. It took four OFT inquiries into Murdoch’s strategy
before action was taken, but this is the first time such a ruling has
been imposed on any newspaper publisher.
Yet the OFT has stopped short of accusing Murdoch of predatory pricing;
it might be anti-competitive, but no rival has been put out of business,
so further sanctions were deemed unnecessary. If we had lost The
Independent, say, in the last six years, News International might have
faced stiffer curbs. It’s facile to point out that the OFT (whose
inquiry took 15 months to complete) was in danger of leaving it too
late, but it did.
Meanwhile, as sighs of relief echo all round, let’s not forget that The
Times now costs 30p. That’s 15p below what it was before price cutting
hit the UK market. News International promises no further cost cutting
’in the current trading conditions’. Those current trading conditions
include a year-on-year decline for The Times every month so far this