Windfall Profits and Sexual Predators: LexisNexis, FairPlay and Hank Asher

Apparently Nebraska Attorney General Jon Bruning has become aware of the lawsuit LexisNexis (Reed Elsevier) filed against Hank Asher alleging breach of Non-Compete Agreement.

According to Legal Newsline, in his role as president of the National Association of Attorneys General, Jon Bruning is contemplating the creation of a task force to investigate the monopoly position Lexis Nexis holds in the data acquisition and data fusion market. Legal documents and other public records are acquired by LexisNexis, manipulated then sold on-demand to the company’s online services subscribers.

UPDATE: On August 8, 2009, LegalNewsline published the following update regarding Attorney General Jon Bruning forming a task force to examine LexisNexis monopoly in the data fusion market:

“Nebraska Attorney General Jon Bruning will not seek a multistate antitrust case against LexisNexis, his spokeswoman told Legal Newsline.”

Leah Bucco-White, the attorney general’s communications director, said Bruning has had discussions with LexisNexis officials since he raised concerns to the company last week at the meeting of the Conference of Western Attorneys General in Sun Valley, Idaho.

“AG Bruning had conversations with LexisNexis management, and they have satisfactorily addressed his concerns,” Bucco-White said.

Five years ago, Hank Asher sold his company, Seisint, to LexisNexis. After successfully negotiating a”carve out” agreement to continue his philanthropic work on behalf of children, Hank Asher signed the 5 year Non-Compete Agreement and exited the public records data fusion market. LexisNexis gained Seisint and its flagship product AccurInt. When LexisNexis also sought purchase of ChoicePoint, the Federal Trade Commission conditionally allowed the acquisition. The pivotal condition was the severance of AutoTrack from the acquisition.

Owned by ChoicePoint and initially developed by Hank Asher, AutoTrack was to be shuffled out of the acquisition and sold to Thomson Reuters. FTC was concerned first about the concentration of virtually all of the industry’s data products in one company’s hands (LexisNexis) and second about the fact that Hank Asher was effectively barred from competing in the market by the Five Year Non-Compete Agreement.

Why was this important to FTC? Because FTC recognized, of all of the industry players, only Hank Asher represented viable competition to LexisNexis. And his hands were tied.

Fast-forward to 2009: the politics of public data and states’ economies have changed. Local and State governments are looking to cut costs and raise revenue – potentially reclaiming the market revenue LexisNexis exploits. And Hank Asher’s Non-Compete Agreement is about to expire. Couple these industry changes with the impending end of Hank Asher’s Non-Compete Agreement and you may understand why LexisNexis filed suit against Hank Asher.

But to fully understand the ramifications of this sham lawsuit, you should be aware of what Hank Asher has been doing lately.

The internet is a marvelous tool used daily for good and evil. Perhaps the vilest use of the internet is the sharing of child pornography by sexual predators worldwide. Someone had to take unfair advantage of each and every one of those children. Someone took away their innocence for pleasure and profit. Someone photographed or videoed those children. And someone is sharing those horrible images right now over the internet on peer-to-peer networks.

The growth of the Internet has fueled an exploding marketplace for child pornography. These are no innocent photos of babies in the bathtub. Last year, law enforcement identified over 300,000 suspects distributing sadistic movies and photographs of very young childen being sexually abused, raped and tortured. The demand for these foul crime scene recordings can only be supplied one way: through the abuse of more and more children.(From Protect.org)

Turnabout is fair play. And Operation FairPlay is the name of a sophisticated program developed more than two years ago by Special Agent Flint Waters of the Division of Criminal Investigation, Wyoming Attorney General’s Office.

Through the existing Fairplay system, investigators log onto peer-to-peer file-sharing networks as any other person would and search for files containing certain keywords that are likely to indicate child pornography is involved. Then they download files–frequently videos, sometimes as long as 20 to 30 minutes… to their own machines. The Fairplay software allows the investigator to obtain the IP address of the file’s sender and, in some cases, display its geographic location in map form. (From CNET)

In an article about Operation FairPlay, Talia Buford of The Providence Journal wrote, “As the tracking software became more sophisticated, it gained more users and yielded more leads. Eventually, it caught the attention of Florida-based software developer Hank Asher, who offered up his computer servers to give the system more power. Now, Asher’s company, TLO, distributes the software to law-enforcement agencies for free. The system is used across the United States and in 29 countries, including Turkey and Australia.”

Does turbocharging Operation Fairplay violate Hank Asher’s Non-Compete Agreement? No!

But initiating a lawsuit against Hank Asher certainly does take money and time away from finding child sexual predators while allowing LexisNexis to continue to reap its monopoly profits.

“LexisNexis is trying to stall this FairPlay program through litigation because the chief funder of it is the inventor of the technology that LexisNexis uses,” (Jon) Bruning said, adding that LexisNexis has failed to understand just how important the Fair Play program is to authorities (From Legal Newsline).

On the contrary, I believe LexisNexis DOES understand how important the FairPlay program is! That understanding is one of the primary reasons for their lawsuit against Hank Asher.

In short, this red herring lawsuit hinders the protection of children by requiring the expenditure of capital and other resources that could be used to protect children. In what appears to be a preemptive strike and with blatant disregard for the carve out in the NCA for philanthropic work, LexisNexis is seeking an extension of the Non-Compete Agreement.

This effectively maintains their monopoly position in the data fusion market allowing the company to rape, um, reap, windfall profits from monopoly pricing while our children fall victim to sexual predators.