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Law360 (May 27, 2020, 4:25 PM EDT) -- The U.S. Department of Labor said Wednesday that it's ending its long-standing practice of giving media access to monthly jobs reports and other data shortly before their public release, citing concerns that some outlets are getting a head start on selling this data to traders.
The change, which takes effect June 3, makes permanent an ongoing freeze that the agency's Bureau of Labor Statistics enacted at the height of the pandemic in March. The agency's success disseminating reports to the public during this pause has shown that giving out the data via media "lock-ups" is "no longer necessary," it said in a notice published Wednesday in the Federal Register.
"The internet permits the public and interested users to obtain releases for themselves," the agency said. "Discontinuing the lock-up will not disadvantage the lock-up participants; it will merely remove the advantage they currently enjoy."
The DOL has held these lock-ups since the mid-1980s, sequestering credentialed reporters in a secure room and providing them embargoed copies of its economic reports 30 minutes to an hour before they become public. The agency uses the lock-ups to release reports designated as principal federal economic indicators, which include its monthly workforce trends snapshot.
The scrums are meant to aid the public's understanding of agency reports by giving reporters time to ready stories for publication alongside the data's broader release. But concerns that some outlets are profiting off their access to this market-moving data now outweigh that benefit, the DOL said Wednesday, citing a series of reports by the agency's inspector general.
The lock-ups allow these companies to profit by selling economic data "formatted for computerized algorithmic trading" more quickly than nonmedia competitors that don't get early access to agency data, the DOL said.
The notice does not accuse specific news organizations of leveraging the lock-ups for profit, though it references advertisements by the Associated Press and Dow Jones touting their access to advance data.
When reached for comment, an AP representative referred Law360 to part of a May 19 story on the planned move raising concerns that ending the lock-ups "would make the economic data releases less secure and less useful to the public" without "leveling the playing field between high-speed investment firms … and the general public." A Dow Jones representative declined to comment Wednesday.
Former Bureau of Labor Statistics Commissioner Erica Groshen cosigned the DOL's concerns in a call with Law360 on Wednesday, describing the move as "long overdue."
Groshen, who headed the agency during former President Barack Obama's second term, said employees for outlets with financial services arms would spend the scrums compiling spreadsheets "so that at the moment the release button was pushed, the clientele of those financial services arms beat everybody else to the market."
"I think as originally conceived it was a fine idea, but it got too expensive [to conduct securely] and it started to benefit someone … other than the general public," said Groshen, who is now a faculty member of the Cornell University School of Industrial and Labor Relations.
Representatives for journalism industry associations did not immediately comment Wednesday.
--Editing by Haylee Pearl.
For a reprint of this article, please contact reprints@law360.com.
