By NYU Staff

Thomson Reuters faces a full inquiry initiated by Europe’s competition watchdog. Under the scanner are datafeed supply agreements between Reuters and its trading customers. According to the European Commission, it is possible that the contracts of the information provider lock its financial services clients into using news and financial data provided by Reuters. This could be anticompetitive and result in a breach of its antitrust rules.

The EU has said that Thomson Reuters might have a dominant position in the supply of real-time market data, such as stock market prices, and abuse this through restrictions in contracts with customers, the FT reported on Tuesday.

One of the issues is the Reuters Instrument Codes that are used to tag individual companies’ securities or futures contracts. The commission will examine if Reuter’s customers are prevented from translating such codes and map such information. These codes identify the securities and the location where they are traded. If the regulator finds an evidence of antitrust abuse, it could entail a threat of fines of up to 10% of its global turnover for every year that the company flouted the law. Financial services clients have to replace these codes by reconfiguring or rewriting their own software, which may result in increased costs, the regulator said.

Analysts cited by the FT said Reuters’ technology platform is based on an open architecture which allows customers to overlay their own applications on Reuters products.

Of late, the EU antitrust division has been busy.  Some U.S. antitrust lawyers told this blogger that increased regulatory activity across the pond could pressure them to step up their workload, especially under the Obama administration.