Thomson Reuters is in the news, but probably not for a reason it’s happy about.  The European Commission has opened formal antitrust proceedings against the news and financial data giant concerning a potential infringement of EC Treaty rules on abuse of a dominant market position related to the company’s coding of its real-time market data feeds. 

Specifically, the EC will investigate whether customers or competitors are prevented from “mapping” Reuters Instrument Codes (“RICs”) to alternative identification codes of other data feed suppliers to the detriment of competition.  RICs are short alphanumerical codes that are used to retrieve information about securities from Thomson Reuters’ real-time data feeds.  A subscriber to the Thomson Reuters real-time market datafeed is not permitted to use the RICs alongside a feed from another service provider.  According to the EC, Thomson Reuters has three rivals in this area and none of them have this restriction.

EC officials identified the potential antitrust abuse when they reviewed Thomson’s merger with Reuters last year, but did not act then because it was not relevant to the merger review, which only examined how a newer larger firm would affect competition.  This suggests companies subject to merger reviews by antitrust authorities should be on guard for issues that could be of concern to those authorities, even if the issues do not rise to a level that would endanger the merger itself.

The chairman of the House Judiciary Committee, Rep. John Conyers (D.-Mich.), has announced that the Committee will meet to consider H.R. 3190 (the “Discount Pricing Consumer Protection Act of 2009”) tomorrow.  The bill would reverse the effects of the Supreme Court’s decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 887 (2007).  Leegin overruled a 1911 Supreme Court decision holding that resale price maintenance was per se illegal.  Under Leegin, resale price maintenance would be judged under the rule of reason. 

The notice of the markup can be found here.

The Committee’s Subcommittee on Courts and Competition Policy passed the bill by voice vote on July 30, 2009. 

For further information on the legislative history of the bill, see our earlier post here.

The outlook for regulatory action seemed to improve last year when the regulatory climate in Washington changed.  It now appears that the improved outlook may only have been illusory as the Government Accounting Office proves just as adept at punting as Congress.

As part of the Credit Card Accountability Responsibility and Disclosure Act (or “Credit CARD Act”) of 2009, Congress directed the GAO to study the issue.  At the time, cynics schooled in the ways of Washington saw the GAO study as a way to defer and ultimately postpone any serious action on this issue.  Based on the GAO’s recently disclosed report, they were right. 

The report begins with the entirely antiseptic title — Rising Interchange Fees Have Increased Costs for Merchants, but Options for Reducing Fees Pose Challenges — and then manages to go downhill from there.  The GAO identifies the real reasons why Congress (or the Federal Reserve) should take action regarding interchange: that the system reflects Visa and MasterCard’s market power over merchants; that interchange is not tethered to any efficiency rationale; and that it regressively imposes a hidden tax on all consumers, including the cash customer, while subsidizing the more affluent customers and their use of rewards cards.  And then it punts by making no real attempt to analyze these issues or address the serious ways they can be fixed. click here for more »