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DOJ and West/THOMSON Merger, what you can do
Re: The DOJ investigation into the WEST/THOMSON merger,
and what you can do.
The following note is an edited version of a memo that was sent to us
about the West/Thomson merger. It contains a number of practical and
thoughtful suggestions for helping the Department of Justice identify
the anti-competitive aspects of the proposed merger.
jamie (firstname.lastname@example.org) CPT/TAP 202/387-8030
According to a short article in the New York Times last
Thursday, the United States Department of Justice has
confirmed that it has commenced an anti-trust review of the
acquisition of West Publishing Company by the Thomson
Corporation. According to the article, officials for the
company's maintain that the two companies operate at
different ends of the business.
In another article on March 4, 1996, in the Connecticut Law
Tribune by Thomas Scheffey, a spokesperson for Thomson was
quoted in referring to the company products "We don't look
at it that way at all. There virtual no overlap in the
The Law Tribune article disclosed that West had retained the
following counsel: Wilmer Cutler & Pickering and Wachtel,
Lipton, Rosen & Katz. West also is known to be represented
by Schatz Paquin Lockridge Grindal & Holstein P.L.L.P. which
has and does represents West in anti-trust litigation
including the pending Oasis Publishing Company case [in
which key documents including a presently pending motion for
summary judgment are under seal.] West also was reportedly
represented by separate anti-trust counsel, Arthur Kaplan,
in connection with the antitrust investigation of the on-
line legal publishing industry in 1994 which investigation
The Law Tribune article stated that Thomson was represented
by: Shearman & Sterling. In addition, Thomson in Washington
matters has previously been represented by Patton Boggs. It
is not known whether they are representing Thomson in
connection with this acquisition.
The Justice Department has 30 days to determine whether to
approve the transaction, or it may request additional
information from the company.
The review if being conducted by the Merger Task Force of
the Antitrust Division. The Task Force consists of
approximately 8 attorneys who are responsible for reviewing
all mergers under the Hart-Scott Rodino Act. Obviously,
there are more attorneys representing the acquisition
parties than are in the Task Force.
Frequently, and because of resource and time limitations,
the Task Force relies upon private parties affected by a
merger to bring facts and analysis to the attention of the
Task Force. However, the Task Force also believes that
those in impacted industries have the most knowledge. In
some situations, those adversely affected may not have
organized representation that may bring information and
analysis to the attention of the Task Force. The Task Force
reviews transactions in many industries, and cannot be
expected to understand the dynamics and other factors of all
industries. Even though the Task Force consists of
practicing lawyers, they are not necessarily informed as to
information commonly known or available to those purchasing
or using legal information or involved in the various
aspects of legal publishing, and probably have little access
to situations particular to a state.
The chief of the Task Force may be contacted as follows:
Craig W. Conrath
Merger Task Force
United States Department of Justice
1401 H Street, N.W.
Washington, DC 20530
The Merger Task Force will certainly look at competition
between defined products, such as United States Code
Annotated and United States Code Service. It should be
noted, however, that because of the many new products
introduced by these companies and the absence of published
pricing information, market analysis is not necessarily
In addition to obvious product comparisons, information that
may be relevant to the review includes the following:
1. New products released within the last year that
represent actual or potential competition. Example: West's
Siegel's New York Practice CD-ROM Treatise -- Expanded
Edition. West's CFR etc. Note that future and potential
as well as present competition is relevant.
2. Announced products by the companies. Examples. The
following "Coming Soon" CD-ROM Libraries are advertised on a
recent single postcard from West: New York Code, Rules and
Regulations. New York Practice TM Commercial Litigation in
New York State Courts.
3. Samples of marketing material showing market
competition between the two publishers. Example: recent
full page advertisements comparing Thomson and West federal
4. Statements and comparisons made by sales
representatives of the companies concerning direct
competition of products of the companies. Example:
advantages of one company's CD-ROM search engine over the
other. Advantage of CD-ROM products over on-line.
Advantages of CD-ROM over books of the other company.
5. Pricing deals, tie-ins and predatory pricing involving
competitive products, and products of either companies and
other companies. An example of predatory pricing would be
offering a customer a CD-ROM product to existing customers
of a competitor at $100 below price of product of
competitor, and waiving initial fees.
6. Difficulty of obtaining pricing information, varying
pricing information, absence of printed prices, ambiguity of
pricing, and requirements that customers sign onfidentiality
agreements as to pricing.
7. Behavior of companies after acquisition of other
publishing companies including product changes, pricing
changes, cancellation of products, hirings, layoffs etc.
8. Pricing of products where competition exists as
compared to pricing of similar product in places where
competition does not exist. Example: CD-ROM product pricing
in states where the companies compete directly because of
existence of public domain citations.
9. Refusal to deal. For example, licensing the use of case
citations to Lexis on terms not available to other
10. Impacts on quality and innovations such as new
products, improved products, new and improved technologies,
new types of products.
11. Information and impacts concerning other markets
directly affected by acquisition:
(a) The marketplace to bid on contracts to provide states
with full service official reporting including headnotes and
(b) The advertising marketplace for legal periodicals that
publishing advertising of the companies, financial effect
from reduced advertising, and reduced competition for
premium advertising and effects on editorial policies as
(c) The marketplace to provide under single contracts legal
information services to large institutions such as large law
firms, courts, and governmental legal units ... impact on
consumers and smaller competitors.
(d) The marketplace of related support products such as CD-
ROM search engines, software, citators, Internet services,
news-type services, etc.
12. Cross-Competition. What competition exists across
product types. How do CD-ROM's compete with on-line. Does
fixed price CD-ROM pricing compete with secondary source
materials -- i.e., if consumers are looking for leading
cases, how does full-text searching compete with secondary
source treatises. Is there a distinctions between secondary
products that are considered authoritative, and those that
are research tools alone.
13. Agreements amongst companies. The major players engage
in many cross-agreements. The existence of some of the
agreements may be induced from outward appearances. For
example, Auto-Cite is on Lexis. That means there is
an agreement of some type between Lawyers Cooperative and
Lexis. Evidence of particular agreements reveal the
competitive environment of the industry within which the
acquisition is occurring.
14. Any duplication of facilities and capabilities that may
result in closings and layoffs.
Other general information such as the ability of the
companies to remain independent and compete as independent
It is not necessary that comments submitted be comprehensive
as to subjects or comprehensive within a subject.
Anecdotal information is not necessarily irrelevant.
Numerous anecdotal information may be probative and may
result in further investigation.
A single specific example may permit the Task Force to
phrase a meaningful and intelligent request for information
from the companies.
In addition, it is necessary to understand the nature of
information collection in large organizations. If a request
is directed to a company lawyer by a DOJ, it is not unlikely
that the request in muddied as it travels through layers of
lawyers and down the chain of command to the operating
employee with the information. As the information travels
back up the chain to the submitting lawyer, further
filtering may appear.
For example, if DOJ possess a specific advertisement, and
then phrases a demand to the companies that would encompass
that advertisement, then if the advertisement is not in the
returned information, DOJ is better able to evaluate whether
the response was complete.
Thus, specific pieces of information may be very valuable to
Thus, we encourage those with even single issues or single
examples to communicate those as soon as possible to the
DOJ. Immediate information is required and DOJ just does
not possess the internal resources to accumulate this
Please also send a copy of your submission to TAP, at P.O.
Box 19367, Washington, DC 20036, fax 202/234-5176.
James Love / email@example.com / P.O. Box 19367, Washington, DC 20036
Voice: 202/387-8030; Fax 202/234-5176
Center for Study of Responsive Law
Consumer Project on Technology; http://www.essential.org/cpt
Taxpayer Assets Project; http://www.essential.org/tap