Thursday, February 18, 2010

Weeklies again arguing their cases online

The SF Weekly's latest post on its ongoing predatory pricing lawsuit with the Bay Guardian seemed like old time. It was just two years ago that the two weeklies were filing detailed, lengthy reports on their latest legal maneuvers against one another. After the Guardian won at trial and now is attempting to collect its $21 million judgment, the online "stories" about this legal saga have trailed off.

Now Andy Van De Voorde of the SF Weekly's home office in Phoenix has a report on his company's appeals brief. He makes these points:

• The $21 million award is more than twice the amount the company that operated the Cosco Busan had to pay after spilling tons of toxic bunker fuel into the Bay.

• The size of the judgment "far exceeds the net assets of the SF Weekly and its parent company, New Times Media.

• That if the SF Weekly case were stand, "would likely have a chilling effect on commerce in California, particularly in the publishing and Web start-up industries, where companies often lose money during their initial years of operation."

The SF Weekly also makes a novel argument about lower prices. The Guardian, and countless plaintiffs before it, have successfully argued that they were damaged when a competitor seeking a monopoly position lowered prices below the cost of production to drive rivals out of business. It's the Walmart argument. The store rolls into a small town and charges less than the retailers on Main Street. Those stores close and then Walmart raises its prices to recoup its earlier losses.

The SF Weekly is arguing that because anti-trust laws are about protecting consumers instead of business interests, "lower prices should always be encouraged, unless a plaintiff can prove that the defendant could reasonably expect to recoup its losses by ultimately charging monopoly prices."

One thing is for sure. The Guardian will soon be posting its response to this brief.

1 comment:

will.harper said...

Think you're missing an important point. Unlike the Guardian, other businesses have had to prove their rivals would recoup their losses after they gained a monopoly position. Because the Guardian knew it couldn't say SF Weekly would own SF's crowded media market, it persuaded the trial judge that the Unfair Practices Act doesn't require proof of recoupment. That interpretation makes the UPA laughably broad and unique among anti-trust statutes in the U.S.

The *really* "novel arguments" in this lawsuit were Brugmann's contentions that the rise of the Internet didn't affect his business; and that the Guardian would have had enjoyed its most profitable years ever during an unprecedented downturn in the newspaper industry if it weren't for those meddling kids at SF Weekly.