The head of the Australian Competition and Consumer Commission has warned Australia’s newspaper companies that they should be very careful about behaving like a cartel as they plan ways to make money from the internet and recover from their financial difficulties.

Graeme Samuel issued the advice following last week’s comments by Fairfax chief executive Brian McCarthy, who announced that he would like to hold talks with rival News Limited about ways in which the two businesses could maximise profits from their respective online operations.

Mr McCarthy told The Age “If there’s opportunities to engage with News Limited we would like to look at those as an option.”

At the time Samuel commented that Australia’s largest newspaper publishers would “be better to talk to us, of maybe just talk to their lawyers, before they talk to each other”.

He has since gone further by stressing the need for both companies to abide by the Trade Practices Act, which outlaws anti-competitive behaviour by businesses.

Samuel told Crikey, “I’ve spoken to both organisations and reminded them of their responsibilities under the Act.”

Samuel has taken a keen interest in the activities of the newspaper industry, describing the potential risks as “Trade Practices 101”.

“It is a cornerstone of the Trade Practices Act that companies should not make arrangements, agreements or undertakings which limit competition.”

Samuel said both companies have assured him that they have not held discussions with each other and that they will talk to the ACCC before they do.

However, observers have told Crikey that they fear the industry is already behaving like a cartel and have pointed to a readership measurement tender announced recently by the industry body, Newspaper Works.

As a consortium of Fairfax, News Limited, APN and Western Australian Newspapers, Newspaper Works has called for expressions of interest from companies to measure the consumption and circulation of Australian newspapers in order to provide data for advertisers and media buyers.

Industry insiders believe it will be a case of foxes running the hen house because the publishers will gain greater control over the data which is given to media buyers and advertisers.

One observer told Crikey that in future “newspaper publishers will have the power to decide what data they release to advertisers” and that the company should be seeking an exemption to the Trade Practices Act from the ACCC if it believes it is in the public interest for it to act an industry-wide body.

The insider told Crikey that Newspaper Works has not sought an exemption under the Act.

Samuel told Crikey that he is unaware of the tender.