Brussels, 20 December 2012
Antitrust: Commission renders legally binding commitments from Thomson Reuters
The European Commission has adopted a decision that renders legally binding the commitments offered by Thomson Reuters to create a new licence ("ERL") allowing customers, for a monthly fee, to use Reuters Instrument Codes (RICs) for data sourced from Thomson Reuters' competitors. RICs are codes that identify securities, used by financial institutions to retrieve data from Thomson Reuters' real-time datafeeds. The Commission had concerns that Thomson Reuters' could be abusing its dominant position in the market for consolidated real-time datafeeds through its licensing practices, in breach of EU antitrust rules. To remedy these concerns, Thomson Reuters offered commitments. After two market tests and substantial improvements to the initial offer, the Commission has concluded that the final commitments remedy its competition concerns.
Commission Vice-President in charge of competition policy Joaquín Almunia commented: "Information plays a key role in ensuring that financial markets operate in a healthy and efficient way. In order to correctly assess investment opportunities, market participants need to access accurate and timely financial data, for example through consolidated real-time datafeeds. The commitments offered by Thomson Reuters will enhance competition in this market. Financial institutions that use Reuters Instrument Codes will now be able to switch to alternative providers more easily ".
The Commission had concerns because Thomson Reuters was prohibiting customers to use RICs for retrieving data from alternative data providers. Thomson Reuters prohibited its customers from cross-referencing RICs to identifiers used by other suppliers for sourcing their datafeeds (so-called "mapping") and it prevented third parties from creating and maintaining mapping tables on behalf of customers. The Commission reached the preliminary conclusion that this might create substantial barriers for customers to switch from Thomson Reuters to alternative providers for consolidated data feeds.
The availability of the new licence means that financial institutions that use RICs will now be able to switch without needing to rewrite their applications to remove RICs. Indeed, the ERL gives Thomson Reuters' customers the possibility to switch to competing providers of consolidated real-time datafeeds for their server-based and associated individual applications as well as for their desktop-based applications covered by global datafeed licences. Thomson Reuters will provide licensees with regular and timely updates of the relevant RICs, including the necessary cross-referencing information, such as the relevant trading venue, source, official code, currency and description.
The ERL can be used worldwide provided that the Thomson Reuters' customer has genuine business operations in the European Economic Area (EEA). Licensees will not be obliged to subscribe or to continue to subscribe to any Thomson Reuters data or other services after subscribing to the ERL. The ERL will be available for subscription for a period of 5 years and a customer may also purchase an option to subscribe to the ERL within 2 years after the initial 5 year period. Upon subscription, the ERL is granted to licensees in perpetuity, subject to payment of the relevant fee.
The commitments also allow third parties to develop and maintain a switching tool that allows RICs and rival services to interoperate, by translating RICs into the financial identifiers of other datafeed providers. Subject to a monthly license fee, third party developers can use and keep RICs in the switching tools they develop. Third-party developers and competing datafeed vendors can share information (with the exclusion of RICs themselves) and cooperate closely in building, maintenance, selling and advertising such switching tools.
An independent trustee will monitor Thomson Reuters' compliance with the commitments.
In September 2011, the Commission informed Thomson Reuters of its preliminary view that Thomson Reuters was dominant in the worldwide market for consolidated real-time datafeeds and may have abused its dominant position by imposing certain restrictions as regards the use of RICs, in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA (European Economic Area) Agreement.
The Commission's decision is based on Article 9 of the Antitrust Regulation 1/2003. It takes into account the results of two market tests, launched in December 2011 (see IP/11/1540) and in July 2012 (see IP/12/777). It legally binds Thomson Reuters to the commitments and ends the Commission's investigation into Thomson Reuters' practices in relation to the use of RICs. If Thomson Reuters were to break the commitments, the Commission could impose a fine of up to 10% of the company's total annual turnover without having to prove a violation of the EU competition rules.