Associated Newspapers Ltd: alleged abuse of a dominant position
Office of Fair Trading (OFT) closed Competition Act 1998 case.
Case reference: CA98/02/2006
Summary of work
On 14 February 2003, the Office of Fair Trading (OFT) received a complaint from Northern & Shell plc (N&S) alleging that Associated Newspapers Limited (ANL) had breached the Chapter II prohibition of the Competition Act 1998 (Act).
N&S alleged that this had arisen from ANL's entry into exclusive contracts with London Underground Limited, Network Rail and a number of train operating companies for access to their stations to distribute its free, morning newspaper, 'Metro', in London. N&S claimed that, as a consequence of such exclusive contracts, it was unable to launch a competing free, evening newspaper in London and that the market for London daily newspapers, both paid for and free, had therefore been foreclosed.
The OFT opened a formal investigation on 19 March 2003, under section 25 of the Act, on the basis that it had reasonable grounds to suspect that the Chapter II prohibition of the Act had been infringed. In particular, the OFT suspected that ANL had infringed the Chapter II prohibition of the Act by abusing a dominant position on the market for the sale and/or distribution of free and/or paid-for newspapers in the London area, by entering into the exclusive distribution agreements described above, with the effect of foreclosing the market to new entry.
By a letter dated 28 May 2004, ANL indicated formally to the OFT that it wished to offer binding commitments in order to address the OFT's competition concerns. The proposed commitments were formally offered to the OFT, in the form annexed to the Notice (the Proposed Commitments), on 31 March 2005.
Having considered the Proposed Commitments in detail, the OFT reached a provisional view that they addressed its competition concerns, for the reasons set out in the Notice issued on 15 July 2005, and that, as a result, it was appropriate for the OFT to exercise its discretion, under section 31A (2) of the Act, to close its investigation by way of a formal decision accepting the Proposed Commitments. This provisional conclusion was subject to the outcome of a consultation process initiated by the Notice, which the OFT was required to undertake by paragraph 2 of Schedule 6A of the Act.
The consultation process ended on Friday 26 August 2005 and the OFT has reviewed the consultation responses received. Subsequently, in response to issues arising from the consultation, ANL has agreed to clarify certain of the Proposed Commitments. The OFT has now decided to accept the Commitments, as clarified, for the reasons set out in its Decision, and has therefore closed its file in respect of this investigation.