Regional newspaper publisher Archant has had its acquisition of 27 London newspapers referred to the Competition Commission.
Last year saw Archant purchase all the weekly titles run by Independent News and Media in Greater London, Essex and Kent in two separate deals worth a total of £62m.
But the Office of Fair Trading has now raised questions over whether the sale of some of the titles could result in a substantial lessening of competition in the markets for free and paid-for local newspapers in parts of North and East London.
Archant believes its purchase was legal and will examine the development. If a problem was found, potential remedies could include selling some titles or altering the way they operate.
Vincent Smith, director of competition enforcement at the OFT, said: “The acquisition by Archant of three titles in North and East London has similar characteristics to transactions that recently gave the Competition Commission concern.
“And the transfer of another four titles may result in the creation of a near monopoly in some neighbouring areas.
“So we believe that the Competition Commission needs to look at this merger in greater depth.”
The three titles raising concerns are the Stratford Express, Barking and Dagenham Post and Romford and Havering Post, while the four titles which may result in a “near monopoly” are the Islington Gazette, North London Herald, East London Advertiser and the Ilford and Redbridge Post.
An Archant spokesman said: “Archant remains convinced that the acquisitions are pro-competitive.
“We believe that the competitive framework is broader than that considered by the OFT and this inquiry will allow us todevelop our arguments.”
At the time of the deal, it did not need the prior approval of the Secretary of State as the total average daily paid-for circulation of Archant’s existing newspapers and the papers being purchased were below the 500,000 threshold specified by the DTI.
This is the first newspaper sale to be referred to the Competition Commission since the implementation of the Communications Act 2003 gave the OFT jurisdiction over relevant newspaper mergers, and follows last year’s referral to the commission by the Secretary of State for Trade and Industry on the proposed transfer of the same titles to Newsquest.
The Competition Commission is expected to report by October 14.
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