Antitrust Alert: DOJ Business Review Letter Approves Digital News Registry
On April 1, 2010, the U.S. Department of Justice Antitrust Division (DOJ) issued a Business Review Letter announcing its support of a proposal by the Associate Press (AP) to develop and operate a voluntary news registry to facilitate the licensing and Internet distribution of news content. The DOJ Business Review Letter, which states whether the DOJ intends to challenge the notified action under the antitrust laws, is of interest for its analysis of how the agency will analyze joint ventures involving competitors.
The AP's proposed news registry would consist of a centralized digital database containing news content from multiple content owners. It would allow content owners to register and list individual items of news content, specify the uses others may make of that content, and detail the terms on which such content may be licensed. The registry would enable content users to determine quickly the licensing and use terms applicable to a specific content owner or to individual items of registered content. It would be a nonexclusive method of accessing, licensing and using content on the Internet and would be open, on nondiscriminatory terms, to all owners and users of Internet news content. Content owners would be free to select which, if any, content to include in the registry. They would be allowed to offer registered news content outside of the registry or to join other competing Internet registry services.Based on the representations made by AP, the DOJ concluded:
The AP's proposed Registry is unlikely to have anticompetitive effects on price, output, or competition among participating content owners or users. Participation in the Registry will not be exclusionary or exclusive and it appears that participation is not critical to the commercial success of any content owners or users. Nor will the Registry constrain in any way a content owner's ability to offer its content competitively outside of the Registry. The Registry is not likely to facilitate coordination among content owners, in part because each content owner will set its license terms independently and unilaterally, and because the Registry will use firewalls to partition each content owner's confidential business information.
The DOJ also found that the registry proposal may provide procompetitive benefits by providing a new and efficient mechanism through which content users can obtain licenses for news content, thereby reducing transaction costs. In addition, by digitally tracking and measuring Internet use, the registry may provide content owners with valuable information about their content that is not otherwise available.
The Business Review Letter cautioned that it "does not state an enforcement intention were the AP to propose that other content owners or users take an equity stake in the Registry. In addition, the AP did not propose offering blanket licenses of news content owned by multiple content owners, therefore this letter does not state an enforcement intention regarding that subject."
The various factors identified by the DOJ in its analysis—lack of exclusivity, open access, nondiscriminatory terms, independent pricing, use of firewalls, and efficiencies—highlight the U.S. antitrust issues that must be addressed in forming any joint venture involving competitors and provide useful guidance for businesses contemplating such ventures.
For more information, please contact your principal Jones Day representative or the lawyer listed below.
Kathryn M. Fenton