Cindy Chick stated in her recent posting:
"I just don't think that other than providing information on to the
DOJ on publication overlap and the effect of the merger on the legal
book industry, which I believe is being done, we have anything to say
about it."
I have two comments.
I see Cindy Chick refers to competition in the "legal book industry"
... certainly, the competition between Thomson and West does not
exist only in books. That is as accurate as the initial press
releases which claimed that West does primary law only, and Thomson
secondary law, and do not compete on that score. That having been
thoroughly discredited, I guess the fall back position is to say that
the two companies compete only in the book area.
But, clearly, there is cometition directly and indirectly in all
product delivery markets. In a recent newspaper article, Cindy Chick
says that what should be important is what will happen to on-line
service prices. That is true, and this merger has everything to do
with on-line competition and pricing.
Thomson/LCP competes head on in CD-ROM products for case law,
statutory, and regulatory material ... and even CD-ROM only treatise
products like the social security law CD-ROM product first introduced
by Thomson/CBC and then introduced as a competitive response by West.
Also, for CBC, this type of CD-ROM was sui generis ... the cases came
from Lexis, but I do not think there are similar products and the
reasons for this relates to the history of the CBC product.
In addition, CD-ROM has been the most important competitive factor in
leading to flat rate on-line pricing, at least for smaller
practioners. Indeed, I have heard a story, whether true or not, that
a prior president of Lexis, when asked a few years ago how his firm
would respond to CD-ROM competition, answered "we will just drop our
prices", and that is what happened.
This is why:
Lexis has responded to CD-ROM offered by independents and LCP was by
offering flat-rate access such as the Lexis MVP Plan. One reason
Lexis took this approach is that under the 1988 secret monopoly
sharing agreement with West which settled the litigation between the
two companies, Lexis got the right to use internal page number
on-line, but not on CD-ROM products. So, a Lexis (or Michie) CD-ROM
product would not be competitive with a West CD-ROM product.
Once flat rate pricing started, initially to small firms under MVP to
respond to CD-ROM competition, and as well by larger firms with
secret flat-rate pricing which resulted from the purchasing power of
large firms customers, the result was head to head competition
between Westlaw and Lexis, although muted competition, because these
are the only two that enjoy the benefits of the citation monopoly.
Once Lexis started public flat-rate pricing, West needed to respond.
In addition, West in order to respond to CD-ROM competition from the
independents and LCP, and not wishing to give up a market, was
prodded into more aggressive CD-ROM competition, in the form of
better search engines and lower prices.
Also, LCP, as a provider to Lexis of many databases, in a sense
shares in the Lexis on-line revenue as well as the secret deal
between West and Lexis.
LCP's basic strategy is competiting in the CD-ROM market with the
internal pagination was to create integrated product lines ... with
one CD-ROM linking to the other, and linking to and from products
like ALR. This permitted LCP to provide a competitive response in
the market, even without the internal pagination.
And of course, the frequent postings on LAW-LIB by libraries giving
up certain categories of books for CD-ROM offering free sets of law
books for the cost of shipping is ample demonstration of the
competition between CD-ROM and books.
Finally, if Law Librarians do not have something to say about it, who
should or can? There is really no other organized constituency with
even a basic understanding of the facts which facts include knowledge
of product lines, customers usage, competitive marketing, and present
and historic pricing, all of which are important in conducting a
merger analysis.
Most lawyers, especially institutional lawyers and those who have
gone from law school to clerkship to big firm or government have
basically been insulated from these facts and a broader overview
because of the work of law librarians and as a result of geographic
or subject matter specialization.
Alan
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:: Alan D. Sugarman Federal Appeals on Disc tm CD-ROM ::
:: President Opinions of US Courts of Appeals ::
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