Wisconsin Department of Justice News Release

Settlement reached in Thomson-West antitrust lawsuit

June 19, 1996 - Madison - Attorney General James Doyle announced today that his office, along with six other states and the United States Department of Justice (USDOJ), have reached a settlement of an antitrust lawsuit with two of the nation's largest legal publishers.

Doyle said that his office, the USDOJ and the attorneys general of California, New York, Connecticut, Illinois, Massachusetts and Washington have agreed to a settlement with The Thomson Corporation and West Publishing Company that will address the potential competitive harm resulting from the merger of the two companies.

"This settlement protects consumers by ensuring that competition will be maintained in the legal publication industry following the merger," Doyle said.

The complaint, filed today (Wednesday, June 19, 1996) in the U.S. District Court for the District of Columbia, alleges that the merger would lessen competition substantially in several markets for legal publications nationwide. The proposed settlement outlines certain requirements and allows the companies to go forward with the remainder of their $3.4 billion merger.

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 approximately $368 million in the United States last year. West, based in Eagan, Minnesota, is the largest publisher of enhanced legal materials and related research tools in the country. West had an estimated $700 million in legal publishing sales in the United States last year.

Thomson and West publish numerous competing legal publications, including the only two enhanced U.S. Supreme Court reporters. Some of their products which must be divested under the settlement are: 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, Inc., for its on-line service.

To insure that each divested product will be sold as a visible, ongoing line of business, Thomson is required to divest related production assets in addition to its rights to publication titles. The settlement also requires that Thomson allow the purchaser to hire employees who have been working on the products. The total estimated value of the divestiture products is between $275 million and $300 million and represents approximately $72 million in annual sales.

The agreement also requires Thomson to license openly the right to use the numbering system of individual pages in West's National Reporter System to any third party for a fee. West has long claimed a copyright on the internal pagination of its case reporter system. The settlement does not suggest that the government agencies believe that a license is required for use of such pagination and they expressly reserved the right to comment on the extent, validity or significance of any such intellectual property right claimed by the companies.

The settlement also requires Thomson to grant options to Lexis-Nexis to extend for five years its current licenses for the three important non-legal databases: Investext; ASAP; and Predicasts. In addition, Wisconsin, California and Washington will be given options 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.

This is the largest number of states that have ever joined with the federal government in challenging a merger. The settlement is the result of an investigation led by the USDOJ's Antitrust Division and the state attorneys general.

"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 Anne K. Bingaman, Assistant Attorney General in charge of USDOJ's Antitrust Division.

As required by federal law, the proposed agreement will be published in the Federal Register, together with the USDOJ's competitive impact statement. Any person may submit written comments concerning the proposed settlement within 60 days to the USDOJ. After the comment period, the U.S. District Court may enter the consent decree upon finding it serves the public interest.

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