Source: http://www.justice.gov/atr/cases/f230200/230280.htm
Timestamp: 2014-04-24 00:58:35
Document Index: 359459726

Matched Legal Cases: ['§ 16', '§ 18', '§ 16', '§ 16', '§ 16', '§ 16', '§ 16', '§ 16']

Competitive Impact Statement : U.S. v. The Thomson Corporation and Reuters Group PLC
v. THE THOMSON CORPORATION, and REUTERS GROUP PLC
| CASE NO.: 1:08-cv-00262
Plaintiff United States of America, pursuant to Section 2(b) of the Antitrust Procedures
and Penalties Act ("APPA" or "Tunney Act"), 15 U.S.C. § 16(b)-(h), files this Competitive
Impact Statement relating to the proposed Final Judgment submitted for entry in this civil
antitrust proceeding.
I. NATURE AND PURPOSE OF THE PROCEEDING Defendant The Thomson Corporation ("Thomson") and Defendant Reuters Group PLC
("Reuters") entered into a dual-listing agreement, dated May 15, 2007, pursuant to which
Thomson will control approximately 70% of the combined businesses. The United States filed a
civil antitrust Complaint on February 19, 2008, seeking to enjoin the proposed acquisition. The
Complaint alleges that the likely effect of this acquisition would be to lessen competition
substantially for the distribution and sale of: (1) fundamentals data; (2) earnings estimates data;
and (3) aftermarket research reports in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. This loss of competition likely would result in increased prices for customers. At the same time the Complaint was filed, the United States also filed an Asset
Preservation Stipulation and Order ("Stipulation") and proposed Final Judgment, which are
designed to eliminate the anticompetitive effects of the acquisition. Under the proposed Final
Judgment, which is explained more fully below, Defendants are required to divest copies of
Thomson's fundamentals database, Reuters' earnings estimates database, and Reuters'
aftermarket research reports and all associated tangible and intangible assets necessary to operate
and distribute the databases in a competitive manner (hereafter the "Divestiture Assets"). Under
the terms of the Stipulation, Defendants will take steps to ensure that the Divestiture Assets are
preserved, maintained and operated as economically viable and ongoing competitive businesses. The United States and Defendants have stipulated that the proposed Final Judgment may
be entered after compliance with the APPA. Entry of the proposed Final Judgment would
enforce the provisions of the proposed Final Judgment and to punish violations thereof.
II.	DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED
Thomson and Reuters are information services companies with a substantial presence in
the distribution and sale of financial data, software, and associated services to financial
professionals. Thomson is a Canadian corporation with its principal place of business in
Stamford, Connecticut. Of Thomson's 2007 annual revenue of $7.3 billion, $2.2 billion came
from the collection and distribution of a wide variety of financial data including securities prices,
company profile and financial information (known as "fundamentals"), financial news, earnings
estimates, analyst research, and economic data. Thomson's leading brands include Thomson
ONE terminals, FirstCall estimates and research, I/B/E/S estimates, and Worldscope
fundamentals. Thomson has operations in all of the world's major markets and has customers
Reuters is a British public limited company with its principal place of business in
London, England. Though Reuters is best known to consumers through its global media brand,
$3.6 billion of the firm's approximately $3.9 billion annual revenue through September 30, 2007,
came from the sale of financial data products, services, and software. Like Thomson, Reuters
collects and aggregates a broad range of financial and economic data, including fundamentals
data, earnings estimates data, and aftermarket research reports. Reuters' major brands include its
3000 Xtra, Trader, and Station terminals; Reuters Market Data System software for
disseminating data feeds throughout enterprises; Reuters Fundamentals (formerly Multex
Fundamentals); and Reuters Estimates (formerly Multex Estimates). Reuters has operations and
significant revenues in all major markets around the world.
The proposed transaction, as initially agreed by Defendants on May 15, 2007, would
lessen competition substantially in the markets for fundamentals data, earnings estimates data,
and aftermarket research reports. This acquisition is the subject of the Complaint and proposed
Final Judgment filed by the United States on February 19, 2008. The Competitive Effects of the Transaction on the Relevant Markets for
Fundamentals Data, Earnings Estimates Data, and Aftermarket Research Reports
Investment managers, investment bankers, traders, corporate managers, and others
("institutional financial data users") use financial data to support investment decisions and to provide advice to their firms or clients. These data include relevant news information, pricing
information on various types of investment vehicles, and descriptive and predictive data about
individual companies, market sectors, and the economy. Although some financial information,
such as delayed stock prices and basic news, is available for no charge on public websites, most
institutional financial data users need, and are willing to pay for, higher quality data such as real-time securities prices, real-time standardized earnings estimates, comprehensive and error-checked fundamentals data, pricing data for fixed-income securities, financial analytic tools, and
proprietary news and analysis. Financial data firms such as Thomson and Reuters deliver financial data and other
products to their institutional financial data users through a variety of distribution channels. The
largest is the so-called "terminals" channel, whereby financial data providers package a number
of different types of financial data, such as quotes and prices for a variety of financial
instruments, fundamentals data, earnings estimates data, macroeconomic data, and real-time and
aftermarket research reports, as well as news, charting, and other analytic tools. These types of
financial data, analytic tools, and news, sold in a variety of packaged configurations with optional
content and features, are delivered through customized graphical user interfaces to institutional
financial data users' desktop computers. These products are sold by subscription, generally on a
per-user or enterprise basis, with pricing generally based on a single price for the bundled
products and separately priced optional additions. Financial data providers like Thomson and Reuters also deliver financial data through
electronic data feeds. Some such feeds are sold directly to institutional financial data users,
allowing those users to assemble their own package of financial data, analytic tools, and news;
integrate the data with its own applications; and distribute the data within its own organization to
users' desktops. Feeds are also sold on a wholesale basis to third parties, along with
redistribution rights allowing those firms to distribute the data to their own terminal or internet-based customers. Thomson and Reuters have competed to redistribute such data to third party
providers of financial data terminals to institutional financial data users. These third party
providers of financial data terminals rely on access to certain types of financial data, for which
Thomson or Reuters are the principal providers. Relevant Product Markets
The Complaint alleges that the combination of Thomson and Reuters, as initially agreed
to by Defendants, would cause competitive harm in the markets for the distribution and sale of
fundamentals data, earnings estimates data, and aftermarket research reports.
Fundamentals are data concerning the financial performance and other attributes of
companies, including information from financial statements, calculated financial ratios, per share
data, product information, and company profile data. Fundamentals data can pertain to both
publicly-traded or privately-held companies and both U.S. and foreign companies. Financial data providers produce their fundamentals data by harvesting "as reported"
information from the financial statements of thousands of companies and inputting the
information in a database. The as-reported financial data then undergo processes of
"normalization" into a consistent language and format, and "standardization" to a common
accounting convention so that institutional financial data users can compare companies across
currencies, geographies, and accounting standards. Financial data providers add additional value
by combining the company data with share data from stock exchanges, calculating a variety of
financial ratios, error-checking the data, and maintaining electronic distribution systems to reach
subscribers. Institutional financial data users place significant value on fundamentals data that is
available for a long time period using a consistent methodology. Many financial analysts and
designers of electronic trading programs (sometimes known as "algorithmic traders") use
statistical methods to decide when to buy or sell securities. Such institutional financial data users
rely on the availability of many years of uniformly-calculated, error-checked fundamentals data
with which to develop and test their statistical models.
Fundamentals data constitute a relevant antitrust market under Section 7 of the Clayton
Act. A hypothetical monopolist of fundamentals data would be able to impose a small but
significant, non-transitory increase in price without losing sufficient sales to make the price
increase unprofitable. Earnings Estimates Data
An earnings estimate is a prediction of a company's earnings, often expressed in terms of
quarterly or yearly earnings per share. Financial data providers collect earnings estimates from
broker reports on an ongoing basis. Collecting earnings estimates data involves obtaining the
research reports from a wide range of brokerage houses and other financial institutions. Some
firms maintain databases of published earnings estimates going back years or decades. Errors in
the data are corrected, and as-reported data is normalized according to common accounting
conventions. Financial data providers also calculate various consensus estimates across
industries or sectors. These functions add significant value.
Institutional financial data users use earnings estimates data when they decide whether to
trade or invest in individual securities. Some institutional financial data users use historical
earnings estimates data to evaluate investment strategies. For example, an analyst with a
quantitative model for evaluating stock investments may back-test the proposed model with ten
years of earnings history data to determine whether the model would have accurately predicted
past price movements.
The distribution and sale of earnings estimates data is a relevant antitrust market under
Section 7 of the Clayton Act. A hypothetical monopolist in the distribution of earnings estimates
data would be able to impose a small but significant, non-transitory increase in price without
losing sufficient sales to make the price increase unprofitable.
Research reports are detailed research documents prepared by analysts at investment
banks and brokerage firms which evaluate the prospects of specific securities. These reports
explain analysts' opinions and include financial projections, such as the company's projected
earnings per share of stock at the end of the company's next fiscal quarter. A financial institution typically provides research reports to its customers immediately, so
that customers can use the research in trading. Such customers may obtain reports through a
financial data terminal, by email, or from authorized password-protected websites. Later, after an
embargo period of days or weeks, banks and brokerages typically allow their reports to be
released, sometimes for a fee, to other third parties.
Financial data providers aggregate and distribute research reports from hundreds of
investment banks and brokerages, distribute them in real-time to entitled customers of the
authoring investment banks and brokerages upon publication, and offer to sell them to other third
parties once they are no longer embargoed (i.e., in the "aftermarket"). As relevant here, in order
to provide their aftermarket research distribution services, financial data providers have
developed infrastructure including a database of the reports and an electronic distribution system. These firms also create and maintain indices, tables of contents, and search tools so that third
parties interested in purchasing research in the aftermarket can locate and compare the research
reports available for purchase without having to contact individual banks and brokerages.
The distribution and sale of aftermarket research reports constitutes a relevant antitrust
market under Section 7 of the Clayton Act. A hypothetical monopolist in the distribution and
sale of such reports would be able to impose a small but significant, non-transitory increase in
price without losing sufficient sales to make the price increase unprofitable. Relevant Geographic Market
Fundamentals data, earnings estimates data, and aftermarket research reports are
purchased and sold throughout the world by firms that offer their products on a global basis. The
world constitutes a relevant geographic market for the distribution and sale of fundamentals data,
earnings estimates data, and aftermarket research reports.
Defendants are two of the world's top four providers of fundamentals data. Their
products, Thomson Worldscope and Reuters Fundamentals, are highly regarded and well-accepted among institutional financial data users, including investment bankers, traders, money
managers, and corporate managers. For institutional financial data users who require global
coverage and significant historical content, Thomson's and Reuters' fundamentals products are
each others' closest competitive substitutes. The loss of head-to-head competition between
Thomson and Reuters will make it likely that Thomson will unilaterally increase the price of
fundamentals data. The combined firm likely would increase price both to institutional financial
data users to whom they sell fundamentals data directly, either via data feed or as part of a
financial data terminal product sold by Thomson or Reuters, as well as to institutional financial
data users to whom Thomson and Reuters sell indirectly, via resellers that offer financial data
terminals in competition with Thomson and Reuters. The combined firm would have the
incentive and ability to increase the cost of data sold to resellers, or to discontinue such supply of
fundamentals data altogether.
The response of other financial data providers will not prevent or undo the competitive
harm that will likely result from the proposed merger. To the extent other providers rely on
fundamentals data acquired from Thomson or Reuters, the combined firm would control the cost
and availability of such data. Responses by firms with independent access to fundamentals data
also would be unlikely to prevent or undo the transaction's competitive harm. A significant
number of institutional financial data users regard the products of Thomson and Reuters as their
first and second choices when purchasing fundamentals data, and consider fundamentals data
products offered by other financial data providers to be distant third choices. An insufficient
number of institutional financial data users would switch to a competing fundamentals data
product to defeat a price increase imposed unilaterally by the merged firm. Nor would entry or
expansion by other financial data providers be sufficient to defeat the likely anticompetitive
effects of Thomson's proposed acquisition of Reuters because entry into the market for
fundamentals data is difficult, time consuming and costly.
Thomson and Reuters currently constrain each others' prices in the market for
fundamentals data, and the elimination of competition between them will cause competitive harm
in the form of an increased likelihood of higher prices and reduced quality for fundamentals data
in violation of Section 7 of the Clayton Act.
Defendants are two of the three largest suppliers of earnings estimates data in the world,
with a combined market share in excess of 70%. Moreover, for institutional financial data users
that require earnings estimates data with broad, global, and historical coverage, Defendants'
earnings estimates products are each others' closest competitive substitutes. The loss of head-to-head competition between Thomson and Reuters will make it likely that Thomson will
unilaterally increase the price of earnings estimates data. The combined firm likely would
increase the price of earnings estimates data both to institutional financial data users to whom
they sell estimates data directly, either via data feed or as part of a financial data terminal product
sold by Thomson or Reuters, as well as to institutional financial data users to whom Thomson
and Reuters sell indirectly, via resellers that offer financial data terminals in competition with
Thomson and Reuters. The combined firm would have the incentive and ability to increase the
cost of data sold to resellers, or to discontinue such supply of earnings estimates data altogether. The response of other financial data providers will not prevent or undo the competitive
harm that will likely result from the proposed merger. To the extent other financial data
providers rely on earnings estimates data acquired from Thomson or Reuters, the combined firm
would control the cost and availability of such data. Responses by firms with independent access
to earnings estimates data also would be unlikely to prevent or undo the transaction's competitive
harm. A significant number of institutional financial data users regard the products of Thomson
and Reuters as their first and second choices when purchasing earnings estimates data, and
consider earnings estimates data offered by other financial data providers to be distant third
choices. An insufficient number of institutional financial data users would switch to a competing
earnings estimates data product to defeat an anticompetitive price increase. Nor would entry or
effects of Thomson's proposed acquisition of Reuters because entry into the market for earnings
estimates data is difficult, time consuming and costly.
Thomson and Reuters currently constrain each others' prices in the market for earnings
estimates data, and the elimination of competition between them will cause competitive harm in
the form of an increased likelihood of higher prices and reduced quality for earnings estimates
data in violation of Section 7 of the Clayton Act. Aftermarket Research Reports
Defendants are the number one and two distributors of aftermarket research reports in the
world, with a combined market share in excess of 90%. Both are significantly larger than the
third largest distributor of aftermarket research reports. Thomson and Reuters are each others'
two closest substitutes in the distribution and sale of aftermarket research reports. The loss of
head-to-head competition between Thomson and Reuters will make it likely that Thomson will
unilaterally increase the price of aftermarket research reports.
The responses of other financial data providers would not prevent or undo the
competitive harm that will likely result from the proposed merger. Other firms lack the requisite
relationships with hundreds of investment banks and brokerage firms and a comprehensive
collection of research reports, which is both highly valued by institutional financial data users
and extremely costly to duplicate. A significant number of financial data users regard the
products distributed by Thomson and Reuters as their first and second choices when purchasing
aftermarket research reports, and consider aftermarket research report distribution offered by
other financial data providers to be distant third choices. An insufficient number of institutional
financial data users would switch to a competing aftermarket research report distributor to defeat
a price increase imposed unilaterally by the merged firm. Nor would entry or expansion by other
financial data providers be sufficient to defeat the likely anticompetitive effects of Thomson's
proposed acquisition of Reuters because entry into the market for aftermarket research reports is
difficult, time consuming, and costly.
Thomson and Reuters currently constrain each others' prices in the market for aftermarket
research reports, and the elimination of competition between them will cause competitive harm
in the form of an increased likelihood of higher prices and reduced quality for aftermarket
research reports in violation of Section 7 of the Clayton Act.
The Divestiture Assets, described in detail in Schedule 1 to the proposed Final Judgment,
include all of the assets necessary for an Acquirer(s) that possesses the capability to service
institutional financial data users to provide independent and economically viable competition to
the merged firm in the markets for distribution and sale of fundamentals data, earnings estimates
data, and aftermarket research reports. The sale of the Divestiture Assets to a qualified
Acquirer(s) will thus remedy the anticompetitive effects alleged in the Complaint.
The Divestiture Assets have been carefully tailored to maintain the level of competition
that currently exists while avoiding significant and unnecessary disruption for Defendants'
customers that purchase bundled terminal services and respecting the intellectual property rights
of third parties. The Divestiture Assets include (1) intellectual property (copies of databases,
along with software and technical information), (2) rights to hire necessary personnel, (3)
assignment of contributor contracts, (4) assignment of certain customer contracts that will
provide the Acquirer(s) access to an on-going revenue stream, and (5) a variety of transitional
support services. Specifically, the Defendants are required to divest copies of the source
databases of (i) Thomson's Worldscope fundamentals products, (ii) Reuters' earnings estimates
products, and (iii) Reuters' aftermarket research products (which together encompass all of the
data and/or research contained in the databases used by Thomson or Reuters to compete in the
relevant markets), along with all tangible and intangible assets that an Acquirer(s) would need to
operate and maintain the databases and promptly use them to produce competitively viable
fundamentals, earnings estimates, and aftermarket research products. The proposed Final
Judgment requires the Defendants to provide the Acquirer(s) rights to intellectual property, such
as software or trade secrets, used to produce and maintain fundamentals data, earnings estimates
data, or aftermarket research reports, even if Thomson or Reuters also use those assets for
products that are not being divested. With respect to those Divestiture Assets that Defendants
make substantial use of for products other than those relating to fundamentals, earnings
estimates, and aftermarket research, the Defendants may restrict the use by the Acquirer(s) of
such assets to the field of fundamentals, earnings estimates, and aftermarket research, as
appropriate. Finally, the proposed Final Judgment does not require the Defendants to divest
certain tangible and intangible assets used in connection with the Defendants' fundamentals,
earnings estimates, and aftermarket research products the divestiture of which would not advance
the ability of the Acquirer(s) to compete effectively in the pertinent market, given that the
Acquirer(s) would have its own access to such assets. For example, the Defendants need not
divest commercially available hardware and software, their trademarks, or land and buildings.
The proposed Final Judgment requires Defendants to take several steps to assist the Acquirer(s) in using the Divestiture Assets in order to enable the Acquirer(s) to provide prompt
and effective competition in the relevant markets. Paragraph IV(C) provides that the Defendants
must provide the Acquirer(s) with information about key personnel, identified in Schedule 2 to
the proposed Final Judgment, involved in operating the Divestiture Assets, so that the
Acquirer(s) can make offers of employment to such persons. That Paragraph also prohibits
Defendants from interfering with any negotiations by the Acquirer(s) to employ such personnel. Paragraph IV(D) prohibits the Defendants from re-hiring any such persons for a period of 18
months from the date of filing of the Complaint.
Because the Acquirer(s) may need assistance in developing a detailed understanding of
the databases and software comprising the Divestiture Assets, and may need time to develop their
own capabilities to update the databases on an ongoing basis, Paragraph IV(K) of the proposed
Final Judgment gives the Acquirer(s) the option to enter into a transitional support agreement for
up to one year for aftermarket research reports and up to 18 months for fundamentals and
earnings estimates data. At the option of the Acquirer(s), such a transitional support agreement
may require the combined firm to provide consulting and support services as well as regular
updates to the databases comparable to those made by the combined firm to its own comparable
databases. In order to enable the Acquirer(s) to become a viable competitor in the markets for
earnings estimates data and aftermarket research, Paragraph IV(G) of the proposed Final
Judgment, for a period of two (2) years, prohibits Defendants from entering into any new
exclusive agreements with third-party contributors of such data, and limits the terms and
conditions under which Defendants may renew existing exclusive agreements with third-party
contributors of such data. Other provisions of the proposed Final Judgment also take into account that the
fundamentals, earnings estimates, and aftermarket research databases to be divested contain
material contributed by third parties over which those third parties assert continuing intellectual
property rights pursuant to contracts with the Defendants. The proposed Final Judgment gives
the Acquirer(s) access to such third-party contributed data in a manner that respects the third
parties' rights. Specifically, Paragraph IV(H), regarding earnings estimates data and aftermarket
research reports, requires that the Defendants use their best efforts to assign to the Acquirer(s) all
contracts with third parties for contributed data. Where the Defendants obtain assignment of the
contribution contracts to the Acquirer(s) (or otherwise obtain the third parties' consent), copies of
the third-party content will pass to the Acquirer(s) as part of the Divestiture Assets. Where such
assignments or other third-party consent are not obtained on or before the sale of the applicable
Divestiture Assets, Defendants must continue to use their best efforts to obtain assignments of
such contracts until the earlier of: (1) the date on which the Acquirer(s) of the Reuters earnings
estimates and aftermarket research databases have contribution agreements with eighty percent
(80%) of all third-party contributors and 22 of the 25 most significant contributors (identified in
Schedules 3 and 4 to the proposed Final Judgment) that provided earnings estimates data and/or
aftermarket research reports to Reuters pursuant to contract as of the filing date of the Complaint;
or (2) two years after the date of entry of the Final Judgment. Paragraph IV(I) contains similar
requirements relating to the assignment of third-party contracts for fundamentals data. To the
extent necessary third-party consents for fundamentals data, earnings estimates data, or
aftermarket research reports are not obtained before Defendants complete the sale of the
applicable Divestiture Assets, Paragraph IV(J) obligates the Defendants to maintain copies of
third-party content, which will be provided to the Acquirer(s), with all intervening updates, at the
same time as needed consents are obtained.
Paragraph V of the proposed Final Judgment permits the appointment of a Monitoring
Trustee by the United States in its sole discretion and in good faith consultation with the
European Commission, subject to the Court's approval.(1) If appointed, the Monitoring Trustee
will have the power and authority to monitor Defendants' compliance with the terms of the Final
Judgment and the Stipulation. The Monitoring Trustee will have access to all personnel, books,
records, and information necessary to monitor such compliance, and will serve at the cost and
expense of Thomson. The Monitoring Trustee will file monthly reports with the United States
and the Court setting forth Defendants' efforts to comply with their obligations under the
proposed Final Judgment and the Stipulation.
When the United States seeks a divestiture to remedy an antitrust harm in the context of
an acquisition, it requires that the divestiture be completed within the shortest period of time
reasonable under the circumstances. Paragraph IV(A) of the proposed Final Judgment requires
the Defendants to complete the sale of the Divestiture Assets within 60 calendar days after the
filing of the Complaint, or five calendar days after notice of the entry of this Final Judgment by
the Court, whichever is later.(2)
Sale of the Divestiture Assets may be made to one or more Acquirers, provided that in
each instance it is demonstrated to the sole satisfaction of the United States that the assets will
remain viable and the divestiture of the assets will remedy the competitive harm alleged in the
Complaint. The assets must be divested in such a way as to satisfy the United States in its sole
discretion that the assets can and will be used by the Acquirer(s) as part of a viable, ongoing
business that can compete effectively in the relevant markets. Defendants must take all
reasonable steps necessary to accomplish the divestitures quickly and shall cooperate with
Paragraph VI of the proposed Final Judgment provides that, in the event the Defendants
do not accomplish the divestitures within the periods prescribed in the proposed Final Judgment,
the Court will appoint a Divestiture Trustee, selected by the United States in good faith
consultation with the European Commission, to effect the divestitures. If a Divestiture Trustee is
appointed, the proposed Final Judgment provides that Defendants will pay all costs and expenses
of the Divestiture Trustee. The Divestiture Trustee's fee arrangement will be structured so as to
provide an incentive for the Divestiture Trustee based on the price obtained and the speed with
which the divestitures are accomplished. After his or her appointment becomes effective, the
Divestiture Trustee will file monthly reports with the Court and the United States setting forth his
or her efforts to accomplish the divestitures. At the end of six months, if the divestitures have
not been accomplished, the Divestiture Trustee and the United States will make
recommendations to the Court, which shall enter such orders as appropriate, in order to carry out
the purpose of the trust, including extending the trust or the term of the Divestiture Trustee's
Taken together, the assets to be divested and the other obligations imposed by the
proposed Final Judgment will enable a qualified Acquirer(s) with a demonstrated ability to
distribute financial data to institutional financial data users to provide prompt and effective
competition with the combined firm in the markets for fundamentals data, earnings estimates
data, and aftermarket research, both by distributing such data directly to institutional financial
data customers on a stand-alone basis, and by ensuring that providers of financial data terminal
services have access to such data from a source other than the combined firm and are thus able to
distribute such data to institutional financial data customers that purchase such data through
financial data terminals.
Defendants have entered into the Stipulation, filed simultaneously with the Court, to
ensure that, pending the divestitures, the Divestiture Assets are maintained as ongoing,
economically viable, and active business concerns, and Defendants will accomplish the
divestitures required by the proposed Final Judgment. The Stipulation will ensure that the Assets
are preserved and maintained in a condition that allows the divestitures to be effective. It
specifically requires that the Defendants not take any steps to disrupt the provision of data to
firms that resell such data in competition with them until the Acquirer(s) are able to be a viable
alternative source for such data. It also requires that the parties independently price the stand-alone sale of any relevant product. Defendants' compliance with these provisions will be
monitored by the independent Monitoring Trustee and enforced by the Court.
The Stipulation does not more broadly require the Defendants to operate their own
products that include the databases to be divested as separate and independent businesses. The
United States concluded in the unique circumstances of this case that such a requirement was not
necessary to ensure effective relief or protect competition pending the completion of the required
15 U.S.C. § 16(a), the proposed Final Judgment will have no prima facie effect in any subsequent
the Federal Register, or the last date of publication in a newspaper of the summary of this
Competitive Impact Statement, whichever is later. All comments received during this period will
be considered by the United States Department of Justice, which remains free to withdraw its
consent to the proposed Final Judgment at any time prior to the Court's entry of judgment. The
comments and the response of the United States will be filed with the Court and published in the
parties may apply to the Court for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.	VI.	ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT
on the merits against Defendants. The United States could have continued the litigation and
sought preliminary and permanent injunctions against Thomson's acquisition of Reuters. The
United States is satisfied, however, that the divestiture of assets described in the proposed Final
Judgment will preserve competition for the distribution and sale of fundamentals data, earnings
estimates data and aftermarket research reports. Thus, the proposed Final Judgment would
achieve all or substantially all of the relief the United States would have obtained through
litigation, but avoids the time, expense, and uncertainty of a full trial on the merits of the
VII.	STANDARD OF REVIEW UNDER THE APPA FOR THE PROPOSED FINAL
JUDGMENT	The Clayton Act, as amended by the APPA, requires that proposed consent judgments in
antitrust cases brought by the United States be subject to a 60-day comment period, after which
the court shall determine whether entry of the proposed Final Judgment "is in the public
interest." 15 U.S.C. § 16(e)(1). In making that determination, the court, in accordance with the
statute as amended in 2004, is required to consider:
the competitive impact of such judgment, including termination of
alleged violations, provisions for enforcement and modification, duration
of relief sought, anticipated effects of alternative remedies actually
considered, whether its terms are ambiguous, and any other competitive
considerations bearing upon the adequacy of such judgment that the court
deems necessary to a determination of whether the consent judgment is in
the public interest; and	the impact of entry of such judgment upon competition in the
15 U.S.C. § 16(e)(1)(A) & (B). In considering these statutory factors, the court's inquiry is
necessarily a limited one as the government is entitled to "broad discretion to settle with the
2d 1 (D.D.C. 2007) (assessing public interest standard under the Tunney Act).(3)
positively harm third parties. See Microsoft, 56 F.3d at 1458-62. With respect to the adequacy
of the relief secured by the decree, a court may not "engage in an unrestricted evaluation of what
relief would best serve the public." United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988)
(citing United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56
F.3d at 1460-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001). Courts have
[t]he balancing of competing social and political interests affected by a proposed antitrust
consent decree must be left, in the first instance, to the discretion of the Attorney General. The court's role in protecting the public interest is one of insuring that the government
has not breached its duty to the public in consenting to the decree. The court is required
to determine not whether a particular decree is the one that will best serve society, but
whether the settlement is "within the reaches of the public interest." More elaborate
requirements might undermine the effectiveness of antitrust enforcement by consent
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).(4)
proposed settlement is in the public interest, a district court "must accord deference to the
government's predictions about the efficacy of its remedies, and may not require that the
remedies perfectly match the alleged violations." SBC Commc'ns, 489 F. Supp. 2d at 17; see
also Microsoft, 56 F.3d at 1461 (noting the need for courts to be "deferential to the government's
predictions as to the effect of the proposed remedies"); United States v. Archer-Daniels-Midland
Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant due respect to the
United States' prediction as to the effect of proposed remedies, its perception of the market
structure, and its views of the nature of the case).
Courts have greater flexibility in approving proposed consent decrees than in crafting
their own decrees following a finding of liability in a litigated matter. "[A] proposed decree must
be approved even if it falls short of the remedy the court would impose on its own, as long as it
falls within the range of acceptability or is 'within the reaches of public interest.'" United States
v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd sub nom. Maryland v.
have imposed a greater remedy). To meet this standard, the United States "need only provide a
factual basis for concluding that the settlements are reasonably adequate remedies for the alleged
harms." SBC Commc'ns, 489 F. Supp. 2d at 17. Moreover, the court's role under the APPA is limited to reviewing the remedy in
that case." Microsoft, 56 F.3d at 1459. Because the "court's authority to review the decree
to "effectively redraft the complaint" to inquire into other matters that the United States did not
pursue. Id. at 1459-60. As this Court recently confirmed in SBC Communications, courts
"cannot look beyond the complaint in making the public interest determination unless the
complaint is drafted so narrowly as to make a mockery of judicial power." SBC Commc'ns, 489
F. Supp. 2d at 15. In its 2004 amendments, Congress made clear its intent to preserve the practical benefits
of utilizing consent decrees in antitrust enforcement, adding the unambiguous instruction that "[n]othing in this section shall be construed to require the court to conduct an evidentiary hearing
or to require the court to permit anyone to intervene." 15 U.S.C. § 16(e)(2). The language wrote into the statute what Congress intended when it enacted the Tunney Act in 1974, as Senator
Tunney explained: "[t]he court is nowhere compelled to go to trial or to engage in extended
proceedings which might have the effect of vitiating the benefits of prompt and less costly
settlement through the consent decree process." 119 Cong. Rec. 24,598 (1973) (statement of
Senator Tunney). Rather, the procedure for the public interest determination is left to the
Supp. 2d at 11.(5)
_______________/s/________________	Robert P. Mahnke
600 E Street, NW, Suite 9500	Washington, D.C. 20530
1. The European Commission ("EC") conducted a parallel investigation of the proposed
acquisition of Reuters by Thomson. To remedy competition concerns in Europe, the Defendants
have entered into Commitments to the EC to restore competition in certain markets, including
those for fundamentals data, earnings estimates data, and aftermarket research reports. Although
the substantive provisions of the proposed Final Judgment and the EC Commitments are much
the same, there will be a need for consultations between the Department of Justice and EC
regarding certain events such as the selection of the Monitoring Trustee, the Divestiture Trustee,
if necessary, and approval of the Acquirer(s).
2. The proposed Final Judgment also provides that this 60-day time period may be
extended by the United States in its sole discretion for a total period not exceeding 60 calendar
days, and that the Court will receive prior notice of any such extension. 3. The 2004 amendments substituted "shall" for "may" in directing relevant factors for
court to consider and amended the list of factors to focus on competitive considerations and to
address potentially ambiguous judgment terms. Compare 15 U.S.C. § 16(e) (2004), with 15
U.S.C. § 16(e)(1) (2006); see also SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the
2004 amendments "effected minimal changes" to Tunney Act review). 4. Cf. BNS, 858 F.2d at 464 (holding that the court's "ultimate authority under the [APPA]
is limited to approving or disapproving the consent decree"); United States v. Gillette Co., 406 F.
Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the court is constrained to "look at the
overall picture not hypercritically, nor with a microscope, but with an artist's reducing glass").
See generally Microsoft, 56 F.3d at 1461 (discussing whether "the remedies [obtained in the
decree are] so inconsonant with the allegations charged as to fall outside of the 'reaches of the
public interest'"). 5. See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 2000) (noting that
of the competitive impact statement and response to comments alone"); S. Rep. No. 93-298, 93d
Cong., 1st Sess., at 6 (1973)("Where the public interest can be meaningfully evaluated simply on
the basis of briefs and oral arguments, that is the approach that should be utilized."); United
States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ¶ 61,508, at 71,980 (W.D. Mo.
1977) ("Absent a showing of corrupt failure of the government to discharge its duty, the Court, in
making its public interest finding, should . . . carefully consider the explanations of the
government in the competitive impact statement and its responses to comments in order to
determine whether those explanations are reasonable under the circumstances.").