Bias in media coverage of antitrust actions

One of the main goals of competition authorities is to deter anticompetitive practices. That is one of the reasons why antitrust decisions are made public: to reinforce the deterrence effect, as the impact of the mass media on public opinion may affect firms' reputations. Our empirical strategy focuses on identifying how the nature of specific antitrust actions by competition authorities affects the size of news items and their visibility within the newspaper. We study this relationship by using a new database containing all news published in Spain over a 30-month period, regarding all cases analysed by the Spanish competition authority. Our analysis produced two key conclusions about how the media deals with positive and negative news on the reputation of listed and non-listed companies. On average, the difference in size between positive and negative news for listed firms is greater than the difference present in the actions referring to non-listed firms. Secondly, newspapers concede greater visibility to them by positioning more favourably, both on the right-hand side of the paper and on initial pages. These results suggest that the deterrence effect that competition authorities seek by making their decisions public may be weakened by the presence of bias in media.