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Atty. Craig W. Conrath
Chief, Merger Task Force
U.S.D.O.J., Antitrust Division
1401 H. Street, Suite 4000 N.W.
Via Fax: 202-307-5802
Dear Mr. Conrath:
I am a retired lawyer. I write this letter in regard to the proposed Thomson - West merger solely on my own behalf as a consumer and citizen.
I do not think the merger agreement should be approved. The Department's conditions are insufficient to protect competition.
My objections are these:
1. Failure to create viable competition.
Legal publishing has a synergy when a publisher produces law for multiple jurisdictions. Publishers attempt to address the market by creating "systems" that are consistent and easy to use for consumers, and allow the same methods to be used to find law from a variety of sources. In additio there are substantial economies of scale in the editing and production processes.
The consent decree envisions selling some of the products of Lawyer's Cooperative, but not the "system", and not the key products, AmJur and ALR that allow the creation of a system. The result is a series of isolated products that will not compete effectively with West's system and are of questionable viability in the marketplace.
2. Ineffective remedies for citations
The proposed license agreement has a price for use of West's citations that would foreclose its use by any small or new competitors. The only competitor who could afford the flat pricing would be a large one. But the merger eliminates the only large competitor who does not already license West's system. In effect, nothing is accomplished.
Though the prohibition against challenging the validity of West's dubious copyright claims is frequently found in licensing agreements, it traduces the purpose of the merger conditions and is inconsistent with the Department's stated position on copyright of citations.
3. Ineffective remedies for markets that become monopolies.
Wisconsin currently has two competitive official reporters of Wisconsin case law, West and Lawyer's Cooperative. After the merger it will have one-- there will be no competition. The consent decree's remedy is to allow the Wisconsin Supreme Court to renegotiate its contract. Since West will be the only serious publisher available in the market why would renegotiating the contract do anything? A cynic might comment that it would give West an earlier opportunity to exercise its monopoly power.
Indeed, the situation in Wisconsin is somewhat more acute. Lawyer;'s Cooperative has taken the position that its cites are public domain as is the text of the decisions. West takes a contrary opinion. So with the loss of Lawyer's Cooperative, we lose access to public domain law in Wisconsin for small peripheral publishers.
Finally, I must point out that West is a well known "politically connected" company. Its CEO was a key early supporter of Pres. Clinton's first campaign in Minnesota and recently Treasurer for Sen. Feinstein's re-election campaign. West has made many contributions to political campaigns.
The Department certainly should not treat differently a politically connected company -- West has an absolute right to participate in politics. However, in such a case it is important that the Department explain fully and adequately its reasoning so that the Department's decisions can be understood to be free of political taint. This the Department has not done in this case. It fails to reveal or address the degree of concentration left after its proposed conditions. It fails to reveal its reasoning or motives for the conditions, It fails to reveal the course of negotiations.
On the face of it, this is a merger between major competitors in a highly concentrated industry. In appearance it is not a merger that should be approved. Failure to adequately address why the Department is approving it , and why the conditions adequately protect competition leaves the Department open to criticism.