Dialog Sues ACS over Access to Data; Is It Possible - the Two Most Influential Organizations in the Online Database Industry at Opposite Ends of a Law Suit?
Hogan, Tom, Information Today
Dialog Sues ACS Over Access to Data
Dialog Information Services fired the online industry's version of the "shot heard `round the world" when, on June 7, 1990, it filed suit against the American Chemical Society (ACS) in the United States District Court for the District of Columbia. The suit refers to alleged wrong-doings of the Society's Chemical Abstracts Service division (CAS).
Users as well as database producers and other online vendors drew a collective deep breath of amazement as the news flew through the fax machines and electronic mail systems of what is normally a very reserved and camera-shy community of information professionals. After all, don't these sorts of things always get resolved behind closed doors in sunny Palo Alto or conservative Columbus?
Not this time, it seems.
Charges Unfair Competition
In the suit, Dialog charges that restrictions on access to the CAS database, which Dialog claims to have been developed with the aid of more than $15 million in federal funding, violate U. S. antitrust laws and prevent fair competition between CAS and other online suppliers.
A Dialog press release quotes Roger Summit, Dialog's president as saying, "As a customer and a competitor of CAS, we at Dialog are unfairly disadvantaged by the Society's determination to limit the flow of information to our 100,000 customers in over 100 countries worldwide. CAS's actions have severely damaged our business and poorly served consumers of online chemical information."
On page 18 of the 36-page "Complaint," a copy of which information Today obtained from the district court, Dialog alleges ". . . the history of the Dialog/ACS relationship reveals a pattern of predatory conduct by ACS whose purpose and effect was to impede and destroy Dialog's ability to compete with ACS in the downstream market and which lacked any legitimate business or technological justification."
Dialog claims that, as a result of such actions, CAS, through its CAS Online service, enjoyed a growth in its share of the U.S. market for electronic access to the CAS database from 15 percent in 1983 to over 60 percent in 1988. Dialog further asserts that there "exists a dangerous probability that ACS will obtain a monopoly in the market for the provision of electronic information retrieval services" for the CAS database.
Dialog seeks a court injunction for the release of all CAS computer-readable databases to Dialog as well as actual and punitive damages of $150 million. To put that figure in perspective, total annual revenue of Chemical Abstracts Service - print, online, everything - is just about $100 million.
CAS was one of the first organizations to understand the importance of electronic retrieval of information from computer-readable databases. Perhaps the very nature of the science of chemistry, with its emphasis on discrete entities (chemical compounds), cried out for the mechanization of the information retrieval process. During the 1960s and early 1970s, CAS sought and received government grants, through the National Science Foundation, to help develop the Chemical Registry System Database (CRSD). The total amount of the grants received was approximately $15 million.
In the early days, the CAS database was licensed to universities, large corporations, and certain for-profit information centers in magnetic tape form for batch searching. Later, in the early to mid-1970s, Dialog and other companies and organizations were licensed to provide online access to the database. However, CAS never included the abstract portion of the records in the files it licensed to others. Common wisdom at the time was that the only way a database publisher could hang onto its eroding base of print subscribers was to withhold the abstracts from the online database and supply only the bibliographic information plus the indexing, thereby forcing most active users to retain their print subscriptions. …