EDI questions whether exchanges can license data they do not own

Exchange Data International (EDI) has released a report that questions whether stock and derivative exchanges have copyright in closing prices, and whether they can license the redistribution of these closing prices.

The report argues that stock and derivative exchanges do not own the copyright in closing prices and nor do they acquire copyright through statements on their websites or in their licensing contracts. Their databases are also not protected by the EU Database Directive, or by a compilation copyright in the US.

It is increasingly clear that no copyright exists in the data and that stock exchange and derivative databases are unlikely to enjoy database protection. Also, antitrust provisions come into play. While an exchange can recover its reasonable costs of supplying data feeds it cannot subsidise its core operations or run a for-profit business by exploiting the monopoly that it’s been granted by legislation or regulation.

Jonathan Bloch, CEO at EDI, says: “Exchanges operate in a regulated environment. Their excessive prices and restrictive licensing terms in contracts with aggregators and redistributors are likely to be increasingly challenged in the courts and by regulators as abusive and anti-competitive. EDI continues to call on the CFTC and the US Department of Justice to rein in CME’s attempt to charge redistribution fees for the historical end of day prices.”

Andrew Martin, the author of the report, says: “For many years, courts on both sides of the Atlantic have ruled that data of this kind are facts, and facts cannot be copyrighted. While Exchanges might be able to charge for optional value-added services, they cannot compel payment for data that they are typically required to generate and make available. Nor can they impose charges to subsidise their core mandated activities, or to benefit their own licensing business.”

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