Thursday, May 22, 2008

Judge triples damages chain-owned weekly must pay independent for undercutting it with ad rates

A victory for independent weekly newspapers was amplified this week when a California judge said a chain-owned weekly in San Francisco had to pay triple damages -- $15.9 million -- for trying to put the independent San Francisco Bay Guardian out of business with subsidies and bargain advertising rates. Superior Court Judge Marla Miller also slapped SF Weekly with an injunction barring it from selling ads below cost for 10 years. Both papers use free circulation. The ruling followed a jury verdict in March.

"Although offering a lower price is the golden rule of good business, it can be illegal in California if a company purposely undercuts a rival with the specific intention of bankrupting the competition," Meredith May explains in the San Francisco Chronicle. "SF Weekly has vowed to appeal. Its lawyers argue the Guardian lost money due to outside forces, including the dot-com bust, Craigslist and lagging reader interest." SF weekly is owned by Village Voice Media, based in Phoenix. (Read more)

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