The FTC announced that it has intervened to block the proposed US$4.1 billion acquisition by Reed Elsevier Inc. of ChoicePoint Inc. According to the administrative complaint filed with the Commission, the companies are direct competitors in the highly concentrated market for the provision of electronic public records services to law enforcement customers. Reed Elsevier offers public records services through its LexisNexis division, while ChoicePoint offers them through its AutoTrackXP service and CLEAR, a new advanced electronic public records search tool.
Collectively the companies account for more than 80 percent of the market for public records search services sold to law enforcement customers.
To eliminate the potential anticompetitive effects of the consolidation, the FTC will require the combined company to divest all assets relating to the AutoTrackXP and CLEAR services within 15 days of consummating the transaction. Under the terms of a proposed consent order such assets would be acquired by Thomson Reuters Legal Inc., which, according to the FTC, is well-positioned to compete with LexisNexis in the public records services market through its West Publishing division. To ensure the transition to West is successful, the consent order further requires Reed Elsevier to (i) provide transitional services to West for a period of two years following the transfer; (ii) maintain the marketability and viability of ChoicePoint’s public records services operations prior to the transfer; (iii) accept an interim monitor appointed by the FTC to monitor the transition and (iv) periodically report to the FTC until the divestiture is completed. The Commissioners' final vote on the proposed consent order is now pending.