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Wednesday, November 24, 2010

Village Voice Media Response to Ruling in California Below-Cost Pricing Suit

Posted By on Wed, Nov 24, 2010 at 12:35 PM


For more than a century, the California Supreme Court has interpreted antitrust law as protecting consumers from high prices, not protecting the profits of entrenched market leaders who fear competition. The Supreme Court's refusal yesterday to follow Justice Joyce Kennard's wishes and hear this appeal turns a century of pro-consumer California antitrust law on its ear.

No one disputes that, on identical facts, this case would have been dismissed in summary judgment in federal court, where nearly all California antitrust cases are litigated.

The only advertiser who testified in this trial testified on behalf of SF Weekly. There was no evidence -- none -- to dispute that Bay Area advertisers, large and small, benefited from the Weekly's lower prices. There was no evidence that the Weekly ever charged a dime less than a glutted market was willing to pay for advertising. And there is no dispute that by employing professional journalists with health and other employee benefits, instead of freelancers and student interns, the Weekly was punished under the below-cost sales statute.

This is a sad day for consumers who deserve the lower prices that only aggressive competition provides. And it provides a stark and oppressive warning to those who choose to produce quality journalism and absorb its higher costs: that the California courts will draw no distinction in a predatory pricing case between the higher cost of professional journalists and the lower cost of freelancers and wire copy.

Even so, we have no intention of leaving San Francisco. We choose instead to stay, and to continue competing.

"Neither judges with gavels nor editors with martinis (or delusions fueled by martinis) can tell people which website or newspaper to read," Village Voice Media Holdings executive editor Michael Lacey said. "As journalists, we will continue the fight in San Francisco."

Read more about this subject here.

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Andy Van De Voorde


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