Morris Communications Corp. v. PGA Tour, Inc.
31 Media L. Rep. (BNA) 1642, 2002 WL 32151637, 235 F.Supp.2d 1269 (2002)
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Rule of Law:
A company does not violate antitrust laws by refusing to provide a competitor with access to its proprietary, non-public data compilation, as preventing the competitor from free-riding on its investment constitutes a legitimate business justification.
Facts:
- PGA Tour, Inc. ('PGA Tour') promotes professional golf tournaments and invested millions of dollars to develop a proprietary Real-Time Scoring System (RTSS) to compile and transmit scores from all 18 holes nearly instantaneously.
- Morris Communications Corporation ('Morris'), a media company, traditionally received credentials to attend PGA Tour events to provide media coverage.
- The PGA Tour made the scores compiled by RTSS available to credentialed media, including Morris, in an on-site media center.
- Morris began using the scores from the media center to publish them on its own websites and to sell, or 'syndicate,' the real-time scoring information to third-party websites.
- In response, the PGA Tour implemented Online Service Regulations (OLSR) that ultimately prohibited credentialed media from selling or otherwise distributing scoring information obtained in the media center to any third party without the PGA Tour's written consent.
- The PGA Tour stated the purpose of the regulations was to preserve the value of its real-time scoring and give its own website, pgatour.com, a window of exclusivity.
- The PGA Tour offered Morris the option to gather scores for syndication from the public pgatour.com website, but Morris found this alternative unworkable due to the inherent delay.
- The PGA Tour refused to provide Morris with media credentials that would allow it to continue syndicating real-time scores directly from the on-site media center.
Procedural Posture:
- Morris Communications Corporation filed a complaint and a Motion for Preliminary Injunction against PGA Tour, Inc. in the U.S. District Court for the Middle District of Florida, the court of first instance.
- Morris alleged violations of Section 2 of the Sherman Act, the Florida Antitrust Act, and the Florida Deceptive and Unfair Trade Practices Act.
- The District Court denied Morris's Motion for Preliminary Injunction, finding Morris had not shown a substantial likelihood of success on the merits.
- Following discovery, both Morris and the PGA Tour filed cross-motions for summary judgment with the District Court.
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Issue:
Does a professional sports league's refusal to allow a media company to immediately syndicate real-time scores gathered through the league's proprietary scoring system violate Section 2 of the Sherman Antitrust Act?
Opinions:
Majority - Schlesinger, District Judge
No. The PGA Tour's refusal to allow Morris to syndicate real-time scores from its proprietary system does not violate the Sherman Act because the restrictions are supported by legitimate business justifications. The PGA Tour has a property right in the compiled scores before they enter the public domain, and it is entitled to protect its substantial investment in its RTSS from competitors seeking to free-ride on its efforts. The court found that Morris was asking to be provided with the PGA Tour's valuable compilation of scores at no cost in order to directly compete with the PGA Tour. This is a classic case of free-riding, and preventing it is a valid business reason that negates Morris's antitrust claims. The court analogized the situation to the early 20th-century 'ticker cases,' where exchanges were held to have a property right in their compiled stock quotations before they became public. Furthermore, the court held that the on-site media center is not an 'essential facility,' as Morris is not being denied the ability to compete entirely, only the ability to use the PGA Tour's proprietary work product for free. The PGA Tour's actions were a reasonable means to protect its property and not an illegal attempt to monopolize.
Analysis:
This decision solidifies the 'free-rider' defense as a powerful justification against antitrust claims, particularly in the context of proprietary information created at significant expense. It establishes that even if the underlying facts (like sports scores) are not copyrightable, the entity that invests in compiling and distributing that information in a unique, time-sensitive manner holds a protectable property interest before that information becomes public. The case is significant for sports leagues, news organizations, and data providers, as it affirms their right to control and commercialize the valuable real-time data they generate. This ruling distinguishes between the media's right to report public information and a competitor's attempt to appropriate a proprietary work product for its own commercial gain without compensation.
