FOR IMMEDIATE RELEASE AT
WEDNESDAY, JUNE 19, 1996 (202) 616-2771
TDD (202) 514-1888
JUSTICE DEPARTMENT AND 7 STATE ATTORNEYS GENERAL REQUIRE THOMSON
CORP. AND WEST PUBLISHING CO. TO RESTRUCTURE $3.4 BILLION MERGER
Largest Joint Federal & State Antitrust Action
WASHINGTON, D.C. -- The Department of Justice and Attorneys
General from seven states today agreed to allow the $3.4 billion
merger of two of the nation's largest legal publishers--The
Thomson Corp. and West Publishing Co.--as long as Thompson sells
more than 50 legal publications valued at a quarter of a billion
dollars, openly licenses West's page numbering system, and
provides other relief to resolve anticompetitive concerns. This
is the largest number of states that has ever joined with the
federal government in challenging an antitrust violation.
The Department's Antitrust Division, along with Attorneys
General from California, Connecticut, Illinois, Massachusetts,
New York, Washington and Wisconsin, filed a joint antitrust suit
and a proposed settlement in U.S. District Court in Washington.
Anne K. Bingaman, Assistant Attorney General in charge of
the Department's Antitrust Division, said, "This settlement is a
victory for all of us. We are all consumers of legal advice from
time to time and as citizens we rely on access to information
about our nation's laws."
The Department said that without these divestitures and
other relief, the merged publishing company would have reduced
competition in dozens of markets nationwide where Thomson and
West are the only publishers. For example, Thomson and West both
produce versions of an annotated United States code, and enhanced
U.S. Supreme Court reporters. The combined company would also
have reduced competition in the provision of online legal
research services.
"Competition in the legal publishing industry helps keep
costs low, improves product quality and increases innovation.
This settlement will ensure that consumers continue to obtain the
benefits of competition and entry in these markets for the basic
tools of legal research," said Bingaman.
Thomson, headquartered in Toronto, Canada, owns several
major legal publishing companies in the United States, including
Lawyers Cooperative Publishing Company, Bancroft-Whitney Company,
and Clark Boardman Callaghan. Thomson reported legal publishing
sales of about $368 million in the United States last year.
West, based in Eagan, Minnesota, is the largest publisher of
enhanced primary law materials and related research tools in the
United States. West had estimated legal publishing sales of $700
million in the United States last year.
The complaint alleges that the merger without the proposed
divestitures would have lessened competition substantially in
nine markets for enhanced primary law--legal publications of
statutes or court decisions in which commentary is offered, in
more than 50 markets for secondary law products--treaties and
legal guides, and in the online services market.
The settlement, if approved by the court, would settle the
suit, and require Thomson to:
Divest more than 50 products valued at between $275 to
$300 million, and representing about $72 million in annual sales
including: U.S. Code Service; U.S. Reports, Lawyers' Edition;
Deering's Annotated California Code; New York Consolidated Laws
Service; and Auto-Cite, a citation system currently licensed by
Thomson to Lexis-Nexis, a division of Reed-Elsevier, for its on-
line service.
Ensure that each divested product will be sold as a
viable, ongoing line of business, by divesting related production
assets in addition to rights to publication titles, and allowing
the purchaser to hire employees who have been working on the
products.
License openly, for a capped fee, to other law
publishers, the right to use the pagination of individual pages
in West's National Reporter System in their products.
Grant to Lexis-Nexis options to extend for five years
its current licenses for the three important non-legal databases-
- Investext, ASAP, and Predicasts.
Give options to California, Washington and Wisconsin to
reopen the bidding for contracts presently held by Thomson for
the publication of their respective official state case law
reporters. In the event any of these states choose another
official reporter, Thomson is required to divest its assets
related to its current contract and to divest its associated
state digest.
The Department said that West has long claimed a copyright
in the internal pagination of its case reporter system. Today's
settlement, with its open licensing requirement does not suggest,
however, that the Department believes a license is required for
use of such pagination. The Department expressly reserves the
right to assert its views concerning the extent, validity, or
significance of any intellectual property right claimed by the
companies. The Department also said that the parties agree that
the settlement shall have no impact whatsoever on any
adjudication concerning such matters.
The proposed settlement is the result of an investigation
lead by the Department of Justice's Antitrust Division and the
Offices of the Attorneys General for New York and California.
This is the seventh joint enforcement action by the
Antitrust Division and State Attorneys General in the past two
years. Working closely with state enforcers on matters of mutual
interest has been a major priority of the Antitrust Division.
As required by the Tunney Act, the proposed consent decree
will be published in the Federal Register, together with the
Department's competitive impact statement. Any person may submit
written comments concerning the proposed consent during the 60-
day comment period to Craig W. Conrath, Chief, Merger Task Force,
Antitrust Division, U.S. Department of Justice, Suite 4000, 1401
H Street, N.W., Washington, D.C. 20530.
At the conclusion of the 60-day comment period, the U.S.
District Court for the District of Columbia may enter the consent
decree upon finding that it serves the public interest.
A complete list of the divestiture products is attached.
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