A win for local publishers, but millions still lost

BY ROJE ADAIMY

After 15 years of anti-competitive dealings with real estate agents in Sydney’s eastern suburbs, the Wentworth Courier has lost its hold on one of the most lucrative advertising markets in the city.
The Australian Competition and Consumer Commission (ACCC) has revoked an exclusive dealing notification given to the newspaper in 1993, which protected them from being taken to court over confidential advertising contracts they held with real estate agents.
The ACCC found that the contracts enforced by the publishers of the Wentworth Courier, News Ltd, and signed by a majority of eastern suburbs real estate agents, had prevented other players from entering the market. It deemed that the deal was detrimental to readers of community newspapers in the eastern suburbs and significantly reduced non-participating agents from competing for business.
The contracts forced participating agents to allocate a minimum of 75 per cent of their print advertising with the Courier, in return for cheaper rates and rebates, and prohibited agents from offering their vendors advertising alternatives.
Several media companies – including Alternative Media Group (publishers of The City News, Bondi View and City Hub) and RedHouse Media Group Ltd (publishers of Eastern Suburbs Living magazine) – revealed in their submissions to the inquiry that a large number of real estate agents were fearful of the potential backlash they’d experience from the Courier if they were to advertise anywhere else.
RedHouse Media Group Ltd, which entered the market in October 2007 with Eastern Suburbs Living magazine, experienced one of the most significant losses in revenue because of the Courier’s actions.
“The real issue for us [was] that we spent over $1 million building our profile and to challenge the ‘immunity’ provided to the Wentworth Courier,” managing director Michael Canty said. “Our brand suffered due to the immunity and the fear that exists in the real estate market, [given that] the Courier have in the past placed heavy embargoes on the agents not complying with their contractual agreements.”
Despite the losses, Mr Canty said that they intend to re-enter the market before February 2009, and is hopeful that this decision, along with new laws regarding predatory pricing, will make for an open and fairer market.
“The ACCC, Office of Fair Trading and Real Estate Institute will be ensuring that we, and others, will have a fair opportunity to compete, that the real estate profession has an equal opportunity to compete, and that consumers benefit by competition and free market conditions,” he said.
“The real question is how did it get approved in first place'”