[Federal Register Volume 60, Number 193 (Thursday, October 5, 1995)]
[Notices]
[Pages 52186-52188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24757]



=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 941 0015]


Federal News Service Group, Inc., et al.; Proposed Consent 
Agreement With Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

-----------------------------------------------------------------------

SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, a District of Columbia corporation that 
sells verbatim news transcripts, and its president, from agreeing, or 
soliciting an agreement, to allocate customers or divide markets with 
any provider of news transcripts; entering into, continuing, or 
renewing any agreement that prevents Reuters America from competing 
with the respondents in the production, marketing or sale of news 
transcripts; renewing its news transcript supply agreement with Reuters 
America for five years; agreeing, or soliciting agreements, with 
competitors to fix or maintain resale prices for news transcripts; and 
requiring or pressuring any competitor to maintain or adopt any resale 
price for news transcripts.

DATES: Comments must be received on or before December 4, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Michael Antalics, FTC/S-2627, Washington, DC 20580. (202) 326-2821.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the following consent agreement containing a consent order 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of sixty (60) days. Public comment is invited. Such 
comments or views will be considered by the Commission and will be 
available for inspection and copying at its principal office in 
accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).
    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Federal News Service Group Inc., and 
Cortes W. Randell, hereinafter sometimes referred to as ``Proposed 
Respondents'', and it now appearing that Proposed Respondents are 
willing to enter into an Agreement containing an Order to Cease and 
Desist from engaging in the acts and practices being investigated,
    It Is Hereby Agreed by and between the Proposed Respondents, their 
attorney, and counsel for the Federal Trade Commission that:
    1. Proposed Respondents Federal News Service Group, Inc. (``FNS'') 
is a corporation organized, existing and doing business under and by 
virtue of the laws of the District of Columbia, with its offices and 
principal place of business located at 620 National Press Building, 
Washington, D.C. 20045. FNS operates under the business name Federal 
News Service.
    2. Proposed Respondents Cortes W. Randell is an individual who is 
President of Proposed Respondents FNS. His principal office and place 
of business is 620 National Press Building, Washington, D.C. 20045.
    3. Proposed Respondents admit all the jurisdictional facts set 
forth in the draft of complaint.
    4. Proposed Respondents waive:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the Order entered pursuant to this agreement; 
and
    (d) Any claim under the Equal Access to Justice Act.
    5. This agreement shall not become a part of the public record of 
the proceeding unless and until it is accepted by the Commission. If 
this agreement is accepted by the Commission, it, together with the 
draft of complaint contemplated thereby, will be placed on the public 
record for a period of sixty (60) days and information in respect 
thereto publicly released. The Commission thereafter may either 
withdraw its acceptance of this agreement and so notify the Proposed 
Respondents, in which event it will take such action as it may consider 
appropriate, or issue and serve its complaint (in such form as the 
circumstances may require) and decision in disposition of the 
proceeding.
    6. This agreement is for settlement purposes only and does not 
constitute an admission by Proposed Respondents that the law has been 
violated as alleged in the draft of complaint, or that the facts as 
alleged in the draft complaint, other than jurisdictional facts, are 
true.
    7. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
Rules of Practice, the Commission may, without further notice to the 
Proposed Respondents, (1) issue its complaint corresponding in form and 
substance with the draft of the complaint and its decision containing 
the following Order to cease and desist in disposition of the 
proceeding, and (2) make information public in respect thereto. When so 
entered, the Order to cease and desist shall have the same force and 
effect as other orders. The Order may be altered, modified, or set 
aside in the same manner and within the same time provided by statute 
for other orders. The Order shall become final upon service. Delivery 
by the U.S. Postal Service of the complaint and decision containing the 
agreed-to Order to Proposed Respondents' addresses as stated in this 
agreement shall constitute service. Proposed Respondents waive any 
right they may have to any other manner of service. The complaint may 
be used in construing the terms of the Order, and no agreement, 
understanding, representation, or interpretation not contained in the 
Order or agreement may be used to vary or contradict the terms of the 
Order.
    8. Proposed Respondents have read the draft complaint and Order 
contemplated hereby. They understand that once the Order has been 
issued, they will be required to file one or more compliance reports 
showing that they have fully complied with the Order. Proposed 
Respondents further understand that they may be liable for civil 
penalties in the amount provided by law for each violation of the Order 
after it becomes final.

Order

I

    For the purposes of this Order:
    A. ``Respondents'' mean Federal News Service Group, Inc., its 
subsidiaries, divisions, and groups and affiliates controlled by 
Federal News Service Group, Inc., its successors and assigns, and its 
directors, officers, employees, agents, and representatives; Federal 

[[Page 52187]]
News Service, its subsidiaries, divisions, and groups and affiliates 
controlled by Federal News Service, its successors and assigns, and its 
directors, officers, employees, agents, and representatives; and Cortes 
W. Randell, an individual, his employees, agents, and representatives, 
and entities controlled by him.
    B. ``Reuters'' means Reuters America Inc., its directors, officers, 
representatives, delegates, agents, employees, successors, assigns and 
its subsidiaries and their successors and assigns.
    C. ``News transcripts'' mean fast turnaround verbatim transcripts 
of statements made by governmental officials or others covering a 
variety of news events or individual news events or parts thereof that 
are usually but not always produced within three (3) hours of the event 
and transmitted in any manner to resellers and customers in the United 
States. The definition of ``news transcripts'' does not include the 
``Daybook'', a daily calendar of news events not containing news 
transcripts, which is sold by Reuters to FNS.
    D. ``News Transcript Provider'' means any person or entity which 
produces news transcripts, by itself or through an arrangement by which 
a third party produces news transcripts exclusively for that person or 
entity, and markets and sells such news transcripts as a daily news 
service on a subscription basis.

II

    It Is Ordered that Respondents, directly, indirectly, or through 
any corporate or other device, in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from entering into, attempting to enter 
into, or continuing or attempting to continue, any combination, 
agreement or understanding, either express or implied, with any News 
Transcript Provider to allocate or divide markets or customers with 
respect to news transcripts.

III

    It Is Further Ordered that Respondents, directly, indirectly, or 
through any corporate or other device, in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from entering into, continuing, or renewing 
any agreement between Respondents and Reuters that prevents Reuters 
from in any way competing with Respondents for the production, 
marketing or sale of news transcripts.

IV

    It Is Further Ordered that for five (5) years from either the date 
this Order becomes final or July 31, 1995, whichever is later, 
Respondents directly or indirectly, or through any corporate or other 
device, in or affecting commerce, as ``commerce'' is defined in the 
Federal Trade Commission Act, do cease and desist from entering into, 
continuing, or renewing any agreements with Reuters providing for the 
supply of news transcripts or the purchase or sale of news transcript 
customer contracts or accounts.
    Provided that nothing in this Order shall prohibit Respondents 
from:
    A. Selling a subscription for news transcripts to Reuters for 
Reuters internal use but not for resale; and
    B. Contracting with Reuters for Reuters to supply Respondents with 
Reuters' Daybook.
    It Is Further Ordered that Respondents, directly or indirectly, or 
through any corporate or other device, in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from:
    A. Entering into, attempting to enter into, maintaining, enforcing, 
or attempting to enforce, any agreements or understandings with any 
competitor in the production, distribution, or sale of news 
transcripts, or any purchaser or reseller of news transcripts which is 
directly or indirectly supplied by Respondents, that fix, establish, 
control, or maintain resale prices or resale price levels for news 
transcripts; or
    B. Requiring, coercing, or otherwise pressuring any competitor in 
the production, distribution or sale of news transcripts, or any 
purchaser or reseller of news transcripts which is directly or 
indirectly supplied by Respondents, to maintain, adopt, or adhere to 
any resale price or resale price level for news transcripts.

VI

    It Is Further Ordered that Respondents shall:
    A. Within thirty (30) days after the date this Order becomes final, 
distribute a copy of this Order and complaint to each of their 
employees and news transcript resellers.
    B. Within ninety (90) days after the date this Order becomes final, 
and annually thereafter for five (5) years on the anniversary of the 
date this Order becomes final, and at such other times as the 
Commission may, by written notice to the Respondents require, file a 
verified written report with the Commission setting forth in detail the 
manner and form in which the Respondents have complied and are 
complying with this Order.
    C. Maintain and make available to Commission staff for inspection 
and copying upon reasonable notice, records adequate to describe in 
detail any action taken in connection with the activities covered by 
this Order.
    D. Notify the Commission at least thirty (30) days prior to any 
proposed change in the corporate Respondent such as dissolution, 
assignment or sale resulting in the emergence of a successor 
corporation, or the creation or dissolution of subsidiaries, or any 
other change in Respondents which may affect compliance obligations 
arising out of this Order.

VII

    It Is Further Ordered that this Order shall terminate as follows:
    A. With respect to Federal News Service Group, Inc., this Order 
shall terminate twenty (20) years from the date this Order becomes 
final.
    B. With respect to Cortes W. Randell, this Order shall terminate 
twenty (20) years from the date this Order becomes final, unless Cortes 
W. Randell totally ceases and does not resume his participation in the 
news transcript business in any capacity, in which case this Order 
shall terminate five (5) years from the date he ceased participating in 
the business.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from Federal News Service Group, Inc. 
(``FNS''), which is located in Washington, DC, and its President, 
Cortes W. Randell.
    The proposed consent order has been placed on the public record 
for sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and decide whether it should withdraw from the agreement 
or make final the agreement's proposed order.
    The complaint alleges that FNS and Cortes Randell engaged in 
acts and practices that have unreasonably restrained competition in 
the news transcript business in violation of Section 5 of the 
Federal Trade Commission Act. News transcripts are fast turnaround 
verbatim transcripts of a variety of news events primarily involving 
the federal government. Cortes Randell is the President of FNS, and 
the complaint alleges that he formulated, directed, and controlled 
the alleged acts and practices of FNS.
    The complaint alleges that before May 1993, FNS and Reuters 
America Inc. (``Reuters'') directly competed with each other for 
news transcript customers. The news transcripts sold by Reuters were 


[[Page 52188]]
produced by News Transcripts Inc. (``NTI''), and Reuters had the 
exclusive right to market these news transcripts.
    The complaint alleges that by May 1993, FNS, Reuters and Cortes 
W. Randell agreed that Reuters would become a reseller of FNS-
produced news transcripts and not sell news transcripts to FNS's 
customers; Reuters would not produce or sell any news transcripts 
which compete with FNS-produced news transcripts; and Reuters would 
not sell news transcripts below a minimum monthly price of $500.
    The complaint further alleges that Reuters, in concert with FNS, 
induced NTI to cease producing news transcripts and not to compete 
with FNS. The complaint alleges that the purpose or effect of the 
agreements was to eliminate competition in the production and sale 
of news transcripts. The complaint alleges that after FNS became the 
sole producer of news transcripts, many customers of FNS received 
price increases.
    The complaint also alleges that FNS and Cortes W. Randell, in 
concert with Reuters, coerced a reseller to raise the price of the 
reseller's news transcript database. The reseller raised its price 
to assure its continued supply of FNS-produced news transcripts.
    FNS and Cortes W. Randell have signed a proposed consent 
agreement that prohibits them from agreeing to or attempting to 
agree to allocate customers or divide markets with any provider of 
news transcripts. For a five year period, the proposed consent 
agreement also prohibits FNS from having a supply agreement with 
Reuters or an agreement with Reuters to acquire or sell news 
transcript customer accounts. Additionally, the proposed consent 
agreement prohibits FNS or Cortes W. Randell from entering into 
agreements with Reuters that prevent Reuters from competing in the 
production, marketing, or sale of news transcripts. Finally, the 
proposed consent order prohibits FNS or Cortes W. Randell from 
fixing or attempting to fix resale prices for news transcriptions.
    The purpose of this analysis is to facilitate public comment on 
the proposed order, and it is not intended to constitute an official 
interpretation of the terms of the agreement and proposed order or 
to modify in any way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-24757 Filed 10-4-95; 8:45 am]
BILLING CODE 6750-01-M