Leading Article: Let's ban the cudgels and have a fair fight on the news-stands

This week Rupert Murdoch turned petulant, saying there was "no way" he would call a truce in the newspaper price war. "No one else wants to call a truce, they insult me every day, so they can go to hell," he said. See you there, Rupert. Then, with the breathtaking ability to declare that black is white which has got him where he is today, he added: "People don't seem to like competition much in this country."

Competition, eh? Well, there is competition in a civil society, and there is the law of the cudgel, and they are different things. There is competition which widens consumer choice, and there is the abuse of power. Over the past four years, when Mr Murdoch first started cutting the price of The Times, readers of all newspapers have undoubtedly benefited from lower prices. Your pockets win, the publishers' pockets lose. Last year the combined losses of the four broadsheets and their Sunday siblings came to pounds 50m, give or take an undisclosed sum or two. But Mr Murdoch is not engaged in philanthropy, exerting a downward pressure on prices in order to bring Britain's high-quality press within reach of everyone. He wants to commandeer market share, rather than compete for it on quality and performance grounds. It is one of the first lessons of economics that price wars are not usually good for consumers in the long run.

But the main reason we need a change in the existing competition law is not that we, or any other newspaper, need it in order to survive. It is a matter of principle that Mr Murdoch's predatory pricing should be made illegal in this country, as it is in the United States and Australia, to take two competition-loving countries at random. That is why we and our owners are supporting amendments to the Competition Bill which were debated in the House of Lords on Thursday.

Predatory pricing is hard to define and hard to legislate against. But British competition law has been too weak for too long. It is perfectly possible to give regulators the power to stop price cuts that are likely to lead to a reduction in consumer choice. The present law has two defects. First, the real restrictions on price-cutting only come into play if they are an abuse of a "dominant" position in a particular market. Because Rupert Murdoch does not control an overwhelming share of the newspaper market (he controls something short of 40 per cent of national newspaper circulation), the Office of Fair Trading ruled that his price cuts were a "reasonable commercial strategy". The fact that he is using a dominant position in the satellite television market to fund his ambition to become dominant in the newspaper market was deemed irrelevant. Second, the regulatory system is far too slow in reacting to the fast and often misleading footwork of the likes of Mr Murdoch. As Lord McNally told the House: "In the newspaper industry it isn't enough for a victim to be bleeding. Apparently our present legislation requires a corpse before the Office of Fair Trading will act."

It was disappointing that Lord McNally, a Liberal Democrat, and Viscount Astor, a Conservative, should have needed to table amendments. The Labour manifesto promised as "an early priority" that the Government would "adopt a tough `prohibitive' approach to deter anti-competitive practices and abuses of market power". Just before the manifesto was published, Tony Blair undermined it by politely asking the owner of The Sun to exercise his great power "responsibly", adding elliptically: "I'd like to see a situation where that happens not by legislation ..." Well, Tony, it is no use relying on voluntary restraint from this brand of monopolist. You can forget that forlorn fantasy.

When the Competition Bill was published it contained not so much a U- turn as a series of ominous omissions. One in particular was the failure to recognise that the media is a special case in competition law. In the balance between price and diversity, diversity should count for more in a healthy democracy. What that means, boiled down, is that if this newspaper did not exist it would be a good idea - for the democratic health of the country - if it were commercially practicable to invent it.

The opportunity for the Government to steel its position remains. On Thursday, the Government put up Lord Haskel to read out an anodyne brief in reply to Lord McNally. There is plenty of time before the Bill's next stage for Lord Simon, along with Margaret Beckett and Mr Blair, to think again. We are looking, too, to those prominent Labour politicians who were so vocal in defence of our view before the election to voice their real views again, now that they are in power: step forward Robin Cook, Mo Mowlam, Chris Smith, and others. Mr Murdoch said he wasn't worried by the prospect of American-style anti-monopoly laws. Take him at his word.