The fine follows a complaint from free rival newspaper the Aberdeen & District Independent, that Aberdeen Journals -- part of DMGT's Northcliffe Newspapers -- tried to squeeze it out of the market by lowering the prices of advertising in its free newspaper, The Herald & Post.
The OFT launched an inquiry into the complaint and found that Aberdeen Journals "incurred losses on The Herald & Post in an attempt to expel the Aberdeen & District Independent, its only rival, from that market".
The OFT said Aberdeen Journals began its aggressive pricing policy when the Independent launched in 1996. It was found to have carried on after March 2000 when the Competition Act changed to prevent anti-competitive behaviour.
John Vickers, director general of the OFT, said, "Aberdeen Journals engaged in a persistent campaign of predatory conduct against the Aberdeen & District Independent. Despite an OFT investigation already being in train, this anti-competitive conduct did not stop when the Competition Act came into force last year.
"Predatory behaviour undermines competition. It is a serious infringement and the penalty has been set to act as an adequate deterrent."
Shares in DMGT fell 5.5p at 3.40pm yesterday afternoon to 746.5p.