There’s been a meeting between AALL reps and LN – none of the conversation is public yet
Hodnicki writes
What-if: Taking “legal or commercial action” against LexisNexis for its anticompetitive tying sales strategy
Library Associations, Products & Services, Publishing Industry July 5, 2018 Leave a comment
On July 2nd, AALL representatives met with LexisNexis representatives to discuss the company’s anticompetitive tying sales strategy. No official word on the outcome. (Not sure one should even expect an outcome after only one meeting. ) Until members hear something, this matter can be viewed as a work-in-progress. However, what if it wasn’t?
In its letter to LexisNexis CEO Mike Walsh, AALL called for an open dialog over the company’s anticompetitive tying sales strategy. If that failed, our association warned of taking “legal or commercial action” against the company. Assuming for this post that dialog does not produce our association’s desired outcome, the cessation of tying print and ancillary products to a Lexis Advance license, then taking legal or commercial action would be costly to AALL’s treasury.
It goes without saying that legal action would be very expensive (unless an AALL-member law firm would take the matter pro bono). The outcome would be unpredictable. But this option is more likely in getting Lexis to change its sales policy. Only someone with expertise in antitrust law (meaning not me) can evaluate this option.
Less unpredictable but also less likely to be as effective as legal action is taking “commercial action.” Commercial action could range from no longer accepting Lexis advertising revenue in AALL publications like LLJ and Spectrum, to a ban from AALL’s annual meeting and its exhibit hall, to a complete ban from all sanctioned activities of AALL and its chapters. Commercial action could be fairly expensive for our association too in some instances.
Using FY2018 budget data as a basis for illustrating future consequences, estimated total advertising revenue from Spectrum is $60,000 and from LLJ is $3,800. That’s hardly a large amount. Spectrum and LLJ are already costing AALL more than the total revenue generated with an estimated annual net deficit of $114,928 for both. Not knowing what portion of Spectrum-LLJ ad revenue comes from Lexis, let’s just assume that the company pays AALL about $30,000. If so, simply banning Lexis from advertising would not hurt AALL’s bottom line that much. AALL would still end up with an estimated adjusted total budget surplus of $50,000 because AALL’s estimated total annual surplus for FY2018 is only $82,260. For such an egregious violation of fair business practices and possible antitrust violations simply banning LN from advertising just does not seem a proportional response. More is needed.
