European regulators have allowed competitors and customers of Thomson Reuters to test potential remedies offered by the financial data provider to settle an antitrust probe, raising hopes that the end of the three-year case is in sight.
The European Commission has allowed rivals such as Bloomberg and Fidessa to test the proposals to open up the availability of some data to investors and rivals in real time. Resolution would help Thomson Reuters avoid a potential fine.
The case had looked to be one of the next testing grounds for the regulator after it blocked the Deutsche Börse-NYSE Euronext merger in February.
The Commission argues that competitive financial markets need up-to-date data at a reasonable cost to participants.
Joaquín Almunia, the competition commissioner, warned in March that the case had “reached a critical stage” as the EC sought to create conditions to foster economic growth in Europe.
The dispute centres around participants’ access to financial data. Thomson Reuters uses a short, alphanumeric code that identifies financial instruments and their trading locations, known as Reuters Instrument Codes. They are used widely by banks, brokers and other institutions to convert information from Thomson Reuters market data feeds to their systems.
However, the commission was concerned customers could not use the code to retrieve data from consolidated real-time data feeds offered by rivals. Those rivals argue that the restriction locks customers into working with Thomson Reuters, since rewriting software to replace RICs is often lengthy and costly.
The case illustrates how the increasing automation of trading is putting pressure on providers of market data terminals to open up their data feeds. The fragmentation of markets into new trading platforms has forced many investors to connect to multiple data feeds, raising their IT costs.
Most antitrust cases market-tested by the commission are accepted, though Thomson Reuters’ first proposal in December was rejected. However, talks since then between Brussels, Thomson Reuters and its rivals mean the commission now has a good idea of the market’s wishes.
Thomson Reuters did not believe it had violated EU competition law, “nor has the commission made any finding of infringement against the firm”.
Its rivals were poring over the 40-page document. “We …are reviewing it and look forward to participating in the process,” Bloomberg said.
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