Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nasdaq  >  Yahoo! Inc.    YHOO

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

Court ruling may offer new path in market-data fee dispute

share with twitter share with LinkedIn share with facebook
share via e-mail
0
05/03/2013 | 06:39pm CET

At first blush the two leading U.S. stock exchanges won a sweeping victory this week in a long-running legal battle over market data - the stock quotes, share prices and other trading information that are highly prized in the electronic marketplace.

But a ruling by the U.S. Appeals Court for the District of Columbia Circuit may also have opened the door for the Internet companies, brokers and others in the case to achieve a decade-old goal of cutting the fees the exchanges charge for the data.

The court ruled in a decision earlier this week it had no jurisdiction over a case brought by the NetCoalition of some 20 Internet companies, including Google Inc and Yahoo Inc, and the Securities Industry and Finance Markets Association, a 600-member lobby for brokers, bankers and asset managers.

The decision appeared to slam the door on the petitioners and remove a potential obstacle to efforts by the New York Stock Exchange and the Nasdaq Stock Market to offset sharp drops in revenue from stock transactions by boosting market data sales.

But the court did offer a path for Sifma and the NetCoalition group to mount a new battle, several people close to the case said.

The court indicated the Securities Exchange Act, which governs exchanges and their responsibilities as self-regulatory organizations, requires that the exchanges provide for the "equitable allocation" of reasonable fees, among other dues and charges.

The petitioners have argued the exchanges are effectively monopolies and competition is not sufficient to restrain prices.

"I intend to submit a ... petition," said Roger Blanc, a lawyer with Willkie Farr who represented the NetCoalition, the name by which the case is also called. "As soon as we can put it together, we'll be back before the circuit court."

The case is notable because of the importance of market data in an electronic market that relies on "signal processing," the analysis of data by high-speed computers, to trade.

Sifma and the NetCoalition had sought judicial review of the proprietary data both NYSE and Nasdaq sell after the Securities and Exchange Commission let stand almost all their filings for new schedules and higher prices for market data in recent years.

The petitioners challenged the SEC over more than a dozen filings, saying the fees were exorbitant and regulators had abdicated their duties to ensure data fees were "fee and reasonable," a loosely defined standard the agency must uphold.

Four of the complaints were combined before the appeals court, which has oversight of the SEC, and the two exchanges with the regulators provided a joint opinion in the case.

Market data has been a thorn in the side of the SEC for years, with regulators unable to resolve the issue despite a series of high-profile hearings and studies from 1999 to 2005.

A former senior SEC official said market data is highly contentious with no easy answer.

Although the appeals court said the Dodd-Frank act stripped it of jurisdiction in the case, the court left intact its August 2010 ruling that there must be evidence that competition is constraining the fees the exchanges charge for the data.

The court also said the exchanges cannot enforce fee rules that are inconsistent with the exchange act, and said fees need to be tied to "some type of cost-based" standard to guard against excessive profits.

The latter point could be a boon for the petitioners' cause. They have long contended the cost of producing the data is negligible and the exchanges charge far in excess of its cost.

"We are pleased that the court has affirmed our ability to provide high-quality data at reasonable rates to vendors who profit from reselling the data to their customers," a spokesman for the Nasdaq said. The NYSE declined to comment.

The NYSE and Nasdaq presented academic studies to bolster their position that competition exists for market data, and they have strongly resisted any cost analysis of their data.

The Nasdaq's chief financial officer has been telling analysts that market data is an "extremely high-margin" business. Revenue from the U.S. sale of proprietary data at the Nasdaq has expanded at a compound annual growth rate of about 10.8 percent since 2007, a period in which data usage has exploded.

The emphasis on market data as a profit center is misplaced, according to former SEC Chairman Harvey Pitt. The exchanges are trying to staunch their hemorrhaging and charging for data is purely a short-term solution to a long-term problem, he said.

A good portion of market data is public and should not be proprietary as the exchanges see it, Pitt said in an interview before the court's ruling this week. Allowing data to be available only for those who can afford it will create hard-to-justify market dislocations, he warned.

"The question is when you've allowed people to treat market data as proprietary for so long, how do you justify making a shift and what accommodations do you make?" Pitt said.

The case is NetCoalition and Securities Industry and Financial Markets Association v Securities and Exchange Commission, U.S. Court of Appeals, District of Columbia Circuit; No. 10-1421.

(Reporting by Herbert Lash; Editing by Steve Orlofsky)

By Herbert Lash

Stocks treated in this article : Google Inc, NASDAQ OMX Group, Inc., NYSE Euronext, Yahoo! Inc.
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on YAHOO! INC.
02/18 YAHOO! SHAREHOLDER ALERT BY FORMER L : KAHN SWICK & FOTI, LLC REMINDS INVESTORS ..
02/17 Faruqi & Faruqi, LLP Encourages Investors Who Suffered Losses In Excess Of $1..
02/16DJCMO TODAY : 21st Century Fox Faces Federal Probe
02/16DJVERIZON COMMUNICATIONS : Pares Price Of Yahoo Acquisition -- WSJ
02/15DJVERIZON COMMUNICATIONS : Yahoo Near Revised Deal That Cuts Price -- Update
02/15DJVERIZON COMMUNICATIONS : Yahoo Near Revised Deal That Cuts Price of Tech Firm by..
02/15 YAHOO : Yhoo) Shares Bought by Arizona State Retirement System
02/11DJYAHOO : Senators Question Yahoo's Candor on Data Breach
02/10 YAHOO! INC. SHAREHOLDER ALERT : Former SEC Attorney Willie Briscoe Investigates ..
02/09 YAHOO : Patent Issued for Systems and Methods for Quote Extraction (USPTO 955818..
More news
Sector news : Search Engines
02/17 CANADA'S MACDONALD DETTWILER TO BUY : Dow Jones
02/17 Canada's MacDonald Dettwiler to buy DigitalGlobe - Dow Jones
02/17DJAmazon Rivals Have Big Clouds to Fill
02/17 MATTEL : partners with parenting website to expand China presence
02/17 China’s private placement boom on borrowed time
More sector news : Search Engines
News from SeekingAlpha
11:15a Tracking David Einhorn's Portfolio - Q4 2016 Update
02/17 Verizon's Yield Is Creeping Higher
02/17 Let The Buyer Beware
02/16 MICROSOFT : The (Azure) Sky's The Limit
02/16 WALL STREET BREAKFAST : Snap IPO On The Horizon
Advertisement
Financials ($)
Sales 2017 5 297 M
EBIT 2017 398 M
Net income 2017 288 M
Finance 2017 5 994 M
Yield 2017 -
P/E ratio 2017 149,88
P/E ratio 2018 129,60
EV / Sales 2017 6,99x
EV / Sales 2018 7,08x
Capitalization 43 031 M
More Financials
Chart YAHOO! INC.
Duration : Period :
Yahoo! Inc. Technical Analysis Chart | YHOO | US9843321061 | 4-Traders
Full-screen chart
Technical analysis trends YAHOO! INC.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 46,1 $
Spread / Average Target 2,2%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Marissa Ann Mayer President, Chief Executive Officer & Director
Eric K. Brandt Chairman
Kenneth A. Goldman Chief Financial & Accounting Officer
Laurie Mann Chief Information Officer
David Filo Director & Chief Yahoo
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
YAHOO! INC.16.63%43 031
ALPHABET INC6.83%578 911
BAIDU INC (ADR)12.63%64 238
YAHOO JAPAN CORPORATIO..17.37%26 590
NAVER CORP--.--%22 368
YANDEX NV22.50%7 812
More Results