Thomson’s Bid for West Publishing Nears Approval
A federal judge said he will clear the way for Thomson Corp.’s $3.4-billion purchase of legal publisher West Publishing Co. if the company agrees to drop a controversial plan to charge rivals for using a legal page-numbering system.
U.S. District Judge Paul L. Friedman said Monday that he expects to approve an antitrust settlement between Thomson and the U.S. Justice Department so long as Thomson also agrees to provide free licenses to legal publishers seeking to use West’s Star Pagination system.
The merger would unite the two biggest publishers in the legal affairs market and help Thomson shift its focus toward online information services and away from newspaper publishing. The pagination question is “minor compared to all the other issues,” said Thomson general counsel Michael Harris. While he said the company hadn’t decided whether to drop its pagination plan, he called Friedman’s opinion a “tremendous victory” for the company.
The Thomson-Justice Department settlement was designed to resolve competitive concerns of the federal government and seven state attorneys general. The settlement has drawn fire from Reed Elsevier Inc.’s Lexis-Nexis and other legal publishers, which say it won’t protect competition.
Terms of the merger were first announced in June, and three months later Toronto-based Thomson and the Justice Department, in the face of criticism, changed them. The modified pact required Thomson to charge lower fees to companies that want to use Star Pagination, a common tool for lawyers when they refer to court cases.
Friedman said that modification didn’t go far enough. The judge, in a written opinion issued in Washington, said Thomson shouldn’t charge other publishers for using the system, at least until the courts resolve West’s contention that it owns a copyright in Star Pagination.
“If the new Thomson/West wishes to preserve its ability to maintain and pursue West’s copyright claim, it should bear the costs of doing so,” Friedman said.
Toronto-based Thomson owns several major legal publishing companies in the United States, including Lawyers Cooperative Publishing Co. and Bancroft-Whitney Co., with sales of $368 million last year.
Eagan, Minn.-based West is the largest publisher of court decisions, with U.S. sales totaling $700 million in 1995.
Federal trial judges have split over the copyright issue. Most recently, a federal judge in New York last month ruled that West didn’t have a copyright on the system. Thomson lawyers have said the company will appeal that decision.
Under its settlement with the Justice Department, Thomson must sell more than 50 legal publications valued at more than $275 million.
Lexis-Nexis argued that those publications aren’t worth anywhere near that much and that their sale won’t keep Thomson and West from achieving a near-monopoly in many important legal research and publication markets. Lexis-Nexis is West’s primary competitor in the market for online legal research.
Friedman said the modifications satisfied any antitrust concerns.
“Based on extensive investigation and analysis, the government concluded that the divestiture products will remain viable and that their divestiture is sufficient to cure the anticompetitive effect of the merger,” Friedman wrote. “It is not the court’s role to second-guess these factual and reasoned predictive findings.”
