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Mr. Beard: It must make bad legislation first to find a villain and then to find the legislation by which to condemn him. We are in danger of doing just that if we follow some of the arguments that have been deployed in this debate. The real issue is whether the rules that apply in a vast range of industries to abuse of a dominant position--or anti-competitive behaviour--apply also to the newspaper industry, or whether that industry requires special treatment.

The Standing Committee considered the clause that had been included by the other place--which deemed that special treatment was required--and removed it from the Bill for very good reasons. The first reason was that the clause did not meet certain of the Bill's principles--such as that it should be universally applicable right across industry, thereby giving it greater clarity. The second was that the Bill should be consistent with European legislation, so that the two legislative regimes could evolve in harmony. The third was that the clause introduced absurdities. The fourth was that the clause introduced a test for predatory pricing that was completely inappropriate and at odds with European precedent.

Each of the proposals in this group falls for one or more of those reasons. New clause 1--taking the proposals in reverse order--like the clause from the other place, speaks of any activity that reduces diversity. Applying that definition produces some absurd examples. Is a newspaper that recruits many gifted writers and attracts readers towards it and away from another newspaper, thereby endangering that other newspaper's existence, to stop recruiting talented writers? Of course not. Many other examples can be concocted to demonstrate the absurdity of the definition.

Amendment No. 8 would reduce the threshold in distinguishing whether there is a dominant position. However, when the matter is analysed and considered within the European context, it is doubtful whether there is such a distinction to be made. The European regime introduces a definition of dominant position that can catch abuse of dominant position in the newspaper industry if there is such a dominant position. In many of the examples cited in this debate, there seems to be an assumption that there is a dominant position for The Times, although very few facts and figures have been quoted to demonstrate it.

Currently, a dominant position will be interpreted as one in which anyone can operate without regard to competition or customers. That definition may very well apply to someone who is using cross-subsidisation from another business to operate predatory pricing. The solution for such practice is for the Director General of Fair Trading to investigate the matter according to the precepts that are already included in clause 18, to reach a conclusion and to operate accordingly. There is no evident reason why newspapers require a special definition of dominant position that is any different from that applying to any other part of industry.

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Amendment No. 1 is very close to the likely definition in European legislation of dominant position. The weakness of including that specific definition in the Bill is that we would freeze the definition at the time when the legislation is passed, whereas European definition of dominant position might evolve and diverge from the Bill's definition. There is therefore a weakness that we will end up with two divergent pieces of legislation, whereas the intention was to have them in close harmony.

I do not think that any of the cases that have been cited in this debate justify a belief that clause 18 cannot deal with abuses and anti-competitive behaviour in the newspaper industry. The amendments are also in danger of introducing absurdities and breaking from some of the Bill's very basic principles--such as its universality and consistency with Europe.

I do not believe that the situation has changed since the Committee considered the Bill. I therefore believe that all three proposals in this group should be rejected, and that the principles applying in the newspaper world should be those stated in clause 18.

Dr. Ladyman: Some of my hon. Friends have railed against Mr. Murdoch and that is fine by me. I hold no candle for Mr. Murdoch and--short of my growing mammaries--I doubt whether he will ever say anything nice about me. I certainly hold no brief to defend his position. Nevertheless, I do not believe that my hon. Friends have shown that the Bill does not deal unamended with the position as they perceive it.

Let me reiterate how the Bill works. Clause 18 defines what cannot be done and who cannot do it. Clause 60 pulls in all European case law in order to define what is not allowed and who cannot do it. As a result of clause 60, anything that we can scrape out of European case law can be used. The provision is not optional. It does not say, "You may," or "You can if you want to." There is no choice in the matter. The Bill provides that European case law must be used in interpreting the Bill.

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As my hon. and learned Friend the Member for Medway (Mr. Marshall-Andrews) said earlier, that includes the Tetra Pak judgment, which provides a mechanistic definition of what predatory pricing involves. Under a mechanistic definition it is not necessary to prove intent. Previous investigations into what Mr. Murdoch and The Times have been doing failed because at the moment it is necessary to prove intent. When that is no longer necessary, as my hon. and learned Friend said, given what everyone is alleging about Mr. Murdoch's predatory pricing activity, if the figures can be demonstrated to prove that, he will be found guilty and prevented from predatory pricing. I do not know whether the figures will prove that or whether the arguments used by The Times are true and the newspaper is not selling below cost. If it is selling below cost, it will be dead meat.

The only question arises in respect of dominant position. As I said earlier, European case law in United Brands v. the Commission says that organisations or individuals may be acting from a dominant position if they can influence the market and have the power from other sources to act independently. It uses almost identical language to amendment No. 1, so in my view amendment No.1 is superfluous. If that is the case and my hon. Friend

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the Minister confirms my interpretation when he replies to the debate, I assume that my hon. Friend the Member for North Durham (Mr. Radice) will not find it necessary to press the amendment to a vote as the provision is already in the Bill.

Amendment No.8 seeks to introduce a new definition of dominant position in respect of newspapers, including the word "substantial". Under European case law, it is not necessary to have 80 per cent. of a holding in a marketplace to be dominant. European case law specifically says that a holding of 40 to 45 per cent. is almost certainly dominant and that a holding of as little as 20 per cent. might be dominant given the right circumstances. If we interpret "substantial" as being different from "dominant" and representing a lower threshold--otherwise the amendment would have no purpose--the amendment is saying that a holding of less than 20 per cent. of the market might represent a "substantial" position and could therefore result in anti-competitive practice. I am sorry to say that that would bring in not only The Times but all the other broadsheet newspapers that would be in a "substantial" position.

Mr. Mullin: My hon. Friend makes my point for me. The amendment is not an anti-Murdoch amendment, as it would apply to anyone--including The Daily Telegraph or the Daily Mirror--who attempted to engage in predatory pricing.

Dr. Ladyman: My hon. Friend is certainly right, but if the definition of predatory pricing according to the Tetra Pak judgment is selling below the cost of production and making a loss on a consistent basis, that is doubly the definition of The Independent. The day we knock on Mr. Murdoch's door and say, "You must stop doing this because you are breaking the law," he will say, "If you bring me to court, I want The Independent taken to court with me because it is also making a loss. It has a substantial holding in the marketplace and is every bit as covered by amendment No.8 as I am." That is why amendment No.8 is dangerous as well as unnecessary.

My hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard) described the absurdities that the new clause would introduce. Under new clause 1, an attempt by The Independent or The Guardian to hire new and better journalists to improve their newspapers could be defined as acting to try to close down competitors. That makes a nonsense of the Bill. The Bill, as the Government have defined it, is strong enough to deal with Murdoch and The Times if it can be shown that Murdoch is selling below the cost of production. If my hon. Friends who fear that that is what he is doing are right, the Bill as it stands is already perfectly adequate to deal with such behaviour. I call on my hon. Friends to reject the amendments and the new clause.

Mr. Boswell: I rise with some diffidence on behalf of Her Majesty's Opposition to intrude on what is clearly the Labour party's private grief. This has certainly been an interesting and illuminating debate, perhaps characterised more by heat than light. It has been characterised more precisely by hon. Members' vain attempts to distil their dislike of a particular individual--Rupert Murdoch--and his empire into a series of penal measures that would be imposed on that empire.

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I should make it clear from the start that the Conservative party is not against competition. Indeed, we Conservatives favour vigorous competition. Our reservations about the Bill more generally reflect the fact that it does not always achieve the objectives that it claims to seek. As a party, we are not in favour of predatory pricing or the abuse of a dominant position. As the hon. Member for South Thanet (Dr. Ladyman) made fairly clear, the issue is whether the measures proposed in the clutch of amendments are appropriate to the ills that are seen.

I should like to make it clear, as my right hon. Friend the Member for Wokingham (Mr. Redwood) did in Committee, that we accept that, in certain specific cases, competition legislation, as it has operated in this country over the years under different Governments, may be required to address some specific problems concerning the newspaper industry. It is clearly appropriate to legislation on mergers and the allocation of titles.

Although I do not have a detailed knowledge of the genesis of legislation, it is fair to say that one of the major concerns was that titles might disappear or be bought for the purpose of closing them down. Regardless of whether that is the intention of any individual in the present scene, we have clearly not failed to secure vigorous competition among broadsheets and tabloids--as well as, increasingly, dare I say, between them--and a wide range of differing titles. That may change. One reason for such a change, to pick up a point made earlier, may be the falling away of the propensity of persons to buy titles that are making losses, in order to advocate a particular position. At the moment, however, we have a very lively newspaper scene and must therefore identify what specific ill the amendments address.

We look forward to the Minister's remarks. I agree with recent comments that a case has not yet been made that any problem can be tackled in the way that is suggested. I apologise to the hon. Member for North Durham (Mr. Radice) for picking up only a few of his latter remarks. I turn particularly to the remarks of the hon. Member for Sunderland, South (Mr. Mullin), who clearly dislikes Murdoch--an opinion to which he is entitled. He moved round several different ways in which the Murdoch problem, as he sees it, could be addressed. It could be predatory pricing, the abuse of a dominant position, something done in the past, motive or effect. It was difficult to pin down how it was to be tackled.

I wish to refer to the most likely of the candidates--the predatory pricing test. As my right hon. Friend the Member for Wokingham pointed out in Committee, it is very difficult in practice to differentiate that consideration from ordinary commercial pricing and keen marketing. As has been mentioned--I declare an interest in this--many of us benefit from subscription arrangements, either to daily newspapers or periodicals which are priced at a considerably lower figure than would apply if we were to buy them day-by-day at the newsagents. Other people may be able to intercept a copy given away on their way to work. There is a wide variety of effective pricing arrangements.

How on earth can we find what is predatory and what is not? That is still not clear to me. It is clear that if one seeks a remedy along those lines, it could be encompassed by the Bill as drafted and it should be possible to do so by generality, rather than by a specific case.

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Another possibility would be to look at predatory pricing in terms of cost, and that was addressed. However, it is clear that most national newspapers, by definition, price themselves at below the cost of production or at an uneconomic level. They make that up by advertising, or they may run at a loss from time to time. One should look at another test, which is that of a formerly dominant position, I was interested in the exchanges that have just taken place, because it is possible to synthesise the situation in which--to take the case of the argument by the hon. Member for South Thanet--a newspaper might have a substantial position in the market; shall we say The Times. However, The Daily Telegraph, which sells many more copies, might have, within the terms of the Bill, a dominant position--so those two newspapers could be subsisting. However, it is not clear whether they would be subjected to the same or different tests.

I mention those examples because I feel that it is difficult to pick our way through to a fungible solution to what I am far from convinced is an actual problem, given the strength and diversity of the press and the weapons that the Bill will give the Government as part of their general approach to competition legislation. This is essentially an argument between the soul and the head of the Labour party as to the way forward. We shall look forward to the Minister of State's effort to wrestle with what are, in the words of the preacher, "doots" among his colleagues.

In conclusion--this is in no sense an attempt to subvert Government Back Benchers, or to discourage them from supporting the Minister; that is a matter for them--in declining to oppose the Government's position, as I anticipate it to be, I would commend the Government on a strange phenomenon. Their characteristic phenomenon is to find a public ill--or, if they cannot find one, to invent one or make a fuss about one--and then to tackle it with a great flourish. People are named and shamed, and action is taken, or threatened to be taken. Something is done about it, particularly if the focus groups say that something should be done.

Quite exceptionally, unusually and, in this case, sensibly, the Government have not bowed to the pressure to produce a specific remedy for a specific ill. They are relying, wisely, on principles of general application. We shall listen to the Minister of State with interest, and I am sure that, his hon. Friends will be listening with even greater interest. We shall--as they say in the history books--then await events.


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