The European Commission Monday said it has opened an antitrust investigation into the U.S. credit rating agency Standard & Poor's, specifically as to whether it has abused its dominant market position in its handling of International Securities Identification Numbers, or ISINs.

"S&P may abuse its monopoly position as the U.S. national numbering agency" by forcing banks and investment funds to pay licensing fees for the use of U.S. ISIN codes in their own databases, the commission said.

The investigation of the agency, owned by the McGraw-Hill Cos. (MHP), began due to complaints by several associations representing financial institutions, the commission said.

S&P-provided ISIN numbers, which are used to identify any bond, or share issued in the market, come bundled together with a descriptive database full of information on the asset, usually sold on to financial news agencies.

However, financial institutions, such as asset managers, are often required to pay a separate fee on top of subscribing to the financial data from the agencies to access S&P's descriptive database. These companies feel that they shouldn't have to pay the full license fee to S&P for additional information which they often don't need.

Commission spokesman Jonathan Todd said the issue is basically about bundling various services together, which is a problem because S&P holds a monopoly in issuing ISIN number in the U.S.

However, an S&P spokesman said that the complaint that prompted the investigation is "without merit," and doesn't represent the activities of the business segment which deals with the ISIN codes.

The company's licensing practices and charges are wholly transparent and in line with industry practices, he said. S&P is cooperating with the commission's inquiry, he added.

-By Peppi Kiviniemi, Dow Jones Newswires; +32 (0)2 741 1483; peppi.kiviniemi@dowjones.com

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