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Latest Thomson Reuters RIC Proposal Addresses Fees, Scope to Assuage EC Inquiry

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Thomson Reuters has made further concessions on licensing policies for its Reuters Instrument Codes (RICs) in an effort to end the European Commission’s enquiry into a breach of European competition rules by the company. The move follows an earlier rejected attempt to address EC anti-competition concerns.

Comparing the revision to Thomson Reuters’ last and unsatisfactory proposal, the Commission adds: “The new proposal improves the previously offered commitments in several regards. The license fee would be reduced and the fee structure simplified. Furthermore, the license could be used worldwide by customers with genuine business operations in the European Economic Area.

“The scope of the license would be widened to cover all RICs which related to instruments traded over the counter (OTC), unless Thomson Reuters was the sole provider of the OTC data at the time of the switch. Furthermore, a separate license would be available for third-party developers to enable them to facilitate customer switching.”

Outlining Thomson Reuters’ latest commitments, the Commission states: “To address the Commission’s concerns, Thomson Reuters offered to allow customers to license additional RIC usage rights for the purpose of switching and to use RICS for retrieving data from other providers against a monthly license fee. In addition, Thomson Reuters would provide customers with the necessary information to map RICs to alternative symbology.”

The Commission is concerned that Thomson Reuters may be abusing its dominant position in the market for consolidated real-time data feeds by prohibiting customers from using RICS for retrieving data from alternative providers and cross-referencing them to codes from other suppliers, essentially preventing customers from switching to alternative market data providers.

A market test of revised policies that started last December failed to satisfy the Commission, leaving Thomson Reuters to return to the negotiation table with another revised offer in May. The Commission has now agreed to market test these latest proposals and interested third parties are able to submit comments on the commitments until August 12.

Not surprisingly, Thomson Reuters welcomed the Commission’s decision on a second market test and was keen to note a service it introduced last month to loosen its hold on RICs and make them available for use with non-real-time information in client and non-client financial institutions’ trade processing systems.

The company states: “The extension of RIC usage rights in relation to real-time data in the remedy proposal is in addition to Thomson Reuters recent commercial launch, announced on June 25, of a new symbology service enabling the use of its RIC symbols across the trade lifecycle for trade processing. The company believes both these separate initiatives will be beneficial to the market and to its customers.”

If Thomson Reuters new stance is enough to satisfy the market test and address the European Commission’s competition concerns, the Commission may adopt a decision based on antitrust regulation and make the commitments legally binding on Thomson Reuters without concluding whether European Union antitrust law has been infringed.

Thomson Reuters maintains it has not violated European Union competition law, but if the second market test fails to achieve an acceptable outcome and the Commission decides Thomson Reuters remains in breach of competition rules it could face financial penalties for failing to reach a settlement. The Commission opened formal proceedings on the issue of abuse of dominant market position back in 2009.

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