Mergers: European Commission Conditionally Clears Reuters’ Acquisition Of Competitor Telerate

The European Commission has cleared under the EU Merger Regulation the acquisition of the financial data provider Moneyline Telerate Holding (“Telerate”) by its major global competitor, Reuters Limited (“Reuters”). The Commission’s review of the operation highlighted a competition concern for financial market data platforms (“MDPs”), but the parties were able to address this concern by committing themselves to providing a global exclusive licence for Telerate’s MDP product to US Hyperfeed Technologies, a provider of financial market data technology.

Competition Commissioner Neelie Kroes added: “We are very pleased with this outcome, which follows close co-operation with the US Department of Justice and co-ordinated efforts to find a suitable remedy that fully resolves the Market Data Platforms competition problem. We also made effective use of the new referral system which allowed the Commission to examine this merger, which would otherwise have been reviewed under the laws of twelve different Member States."

Reuters is one of the two main global providers of financial market data and multimedia news tailored for professionals in the financial services, media and corporate sectors. Being particularly strong in the delivery of money market, equity and equity-related over-the-counter data, Reuters’ activities are somewhat complementary to the activities of its major competitor, Bloomberg, which has a focus on different asset classes in the financial market data segment and uses means other than an MDP for the delivery of its products.

Telerate is also a financial market data and news provider on a global scale, focusing on the distribution of real-time market data from many different sources.

The Commission investigated the competitive effects of the proposed transaction on the supply of real-time market data and MDPs. With respect to the former the Commission found no indication that the merger would bring about either the creation of single dominance or a scenario of collective dominance, since there would still be sufficient suppliers in the market post-merger, among which fierce competition exists.

The investigation did, however, reveal that the merging parties are the only major providers of an MDP world-wide, and that the combination of their proprietary platforms would lead to a nearly uncontested market position in the provision of MDPs. MDPs are the technological means that enable customers of real-time market data to integrate and deliver information from various data vendor sources.

In order to remedy this competition concern, Reuters and Telerate proposed to grant a perpetual exclusive global licence for TRS to Hyperfeed. The licence agreement provides the appropriate legal framework for Hyperfeed to be able to establish itself as a viable and effective competitor to Reuters.