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The fine is against DMGT's Aberdeen Journals unit, part of its Northcliffe Newspapers Group regional newspaper business.

The OFT's decision to impose the penalty follows a Competition Act investigation into allegations of predatory pricing by Aberdeen Journals.

The investigation followed a complaint about Aberdeen Journals' pricing practices made by the Aberdeen & District Independent (a free weekly newspaper) alleging that Aberdeen Journals was acting unlawfully by the particularly low pricing of advertising space in its weekly free newspaper, the Aberdeen Herald & Post.

The OFT found that the DMGT-owned paper was deliberately incurring losses when selling advertising in the Aberdeen Herald & Post (since relaunched as the Aberdeen Citizen) in an attempt to shut out its only direct rival from that market.

The predatory pricing started in response to the launch of the Aberdeen & District Independent in 1996 and continued after the Competition Act came into force on March 1 2000.

The OFT decided that Aberdeen Journals has infringed the Competition Act's Chapter II prohibition, which makes the abuse of a dominant position unlawful.

John Vickers, director general of fair trading at the OFT, said: "Aberdeen Journals deliberately incurred losses in a persistent campaign to remove its only direct rival from the market. This campaign continued despite the fact that the Competition Act 1998 prohibited predatory pricing from March 2000, and despite an OFT investigation already being in train. This is a serious infringement of the law and the penalty should act as a deterrent to others."

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