[Federal Register Volume 60, Number 193 (Thursday, October 5, 1995)]
[Notices]
[Pages 52194-52196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24758]



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

FEDERAL TRADE COMMISSION
[File No. 951-0015]


Reuters America Inc.; Consent Agreement With Analysis To Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: 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, among other things, prohibit a New York-based distributor of 
fast-turnaround verbatim news transcripts from agreeing to or 
attempting to agree to allocate customers or divide markets with any 
provider of 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., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:
Michael E. Antalics, Bureau of Competition, Federal Trade Commission, 
S-2627, 6th Street & Pennsylvania Ave., N.W., 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 Sec. 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 Reuters America Inc., hereinafter 
sometimes referred to as ``Proposed Respondent'', and it now appearing 
that Proposed Respondent is 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 Respondent, their 
attorney, and counsel for the Federal Trade Commission that:
    1. Proposed Respondent Reuters America Inc. (``Reuters'') is a 
corporation organized, existing and doing business under and by virtue 
of the laws of the State of Delaware, with its offices and principal 
place of business located at 1700 Broadway, New York, New York 10019.
    2. Proposed Respondent admits all the jurisdictional facts set 
forth in the draft of complaint.
    3. Proposed Respondent waives:
    (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.
    4. 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 
Respondent, 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.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by Proposed Respondent 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.
    6. 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 Respondent, (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 the attention of the Office of the General Counsel 
at the Proposed Respondent's addresses as stated in this agreement 
shall constitute service. Proposed Respondent waives any right it 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.
    7. Proposed Respondent has read the draft complaint and Order 
contemplated hereby. It understands that once the Order has been 
issued, it will be required to file one or more compliance reports 
showing that it has fully complied with the Order. Proposed Respondent 
further understands that it 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. Respondent means Reuters America Inc., its subsidiaries, 
divisions, and groups and affiliates controlled by Reuters America 
Inc., its successors and assigns, and its directors, officers, 
employees, agents, and representatives.
    B. FNS means Federal News Service Group, Inc/, its directors, 
officers, representatives, delegates, agents, employees, successors, 
assigns and its subsidiaries and their successors and assigns; and 
Federal News Service, its directors, officers, representatives, 
delegates, agents, employees, successors, assigns and its subsidiaries 
and their successors and assigns.
    C. News transcripts mean full-text fast turnaround verbatim 
transcripts of government-related events that are usually but not 
always produced within 

[[Page 52195]]
three (3) hours of the event and transmitted in any manner to resellers 
and customers in the United States. The definition of ``news 
transcripts'' refers to the type of full-text verbatim news transcript 
service formerly marketed by Respondent under the name ``the Federal 
News Reuter Transcript Service.'' News transcripts do not include news, 
information or data of the type generally included in Respondent's 
other news services which may incorporate some quotations or partial 
excerpts from government-related events.
    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 service 
on a subscription basis.

II

    It Is Ordered that Respondent, directly, indirectly, or through any 
corporate or other device, in or affecting commerce, as ``commerce'' is 
defined in the Federal Trade Commission Act, does 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 to divide markets or customers with respect to news 
transcripts.

III

    It Is Further Ordered that Respondent, 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 Respondent and FNS that prevents Respondent from 
in any way competing with FNS 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, 
Respondent 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 FNS 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 Respondent from:
    A. Purchasing a subscription for news transcripts from FNS for 
Respondent's own use but not for resale; and
    B. Contracting with FNS for supplying FNS with Respondent's 
Daybook.

V

    It Is Further Ordered that Respondent, 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 entering into, attempting to enter 
into, maintaining, enforcing, or attempting to enforce, any agreements 
or understandings (1) with any competitor in the production, 
distribution, or sale of news transcripts, that fix, establish, 
control, or maintain resale prices or resale price levels for news 
transcripts, or (2) with any purchaser or reseller of news transcripts 
which is directly or indirectly supplied by Respondent, that fix, 
establish, control, or maintain resale prices or resale price levels 
that such purchaser or reseller charges for news transcripts.

VI

    It Is Further Ordered that Respondent shall:
    A. Within thirty (30) days after the date this Order becomes final, 
distribute a copy of this Order and complaint to each of its officers 
and to each of its employees engaged in the production or sale of news 
transcripts.
    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 Respondent require, file a 
verified written report with the Commission setting forth in detail the 
manner and form in which the Respondent has complied and is 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 Respondent such as dissolution, assignment or 
sale resulting in the emergence of a successor corporation, or the 
creation or dissolution or subsidiaries or any other change in 
Respondent which may affect compliance obligations arising out of the 
Order.

VII

    It Is Further Ordered that this Order shall terminate twenty (20) 
years from the date this Order becomes final.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from Reuters America Inc. (``Reuters''), 
which is located in New York City.
    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 Reuters 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.
    The complaint alleges that from 1988 through May 1993, Reuters 
and Federal News Service Group, Inc. (``FNS''), the dominant sellers 
of news transcripts, directly competed with each other for 
customers. The news transcripts sold by Reuters were produced by 
News Transcripts Inc. (``NTI''), and Reuters had the exclusive right 
to market these news transcripts.
    The complaint alleges that by May 1993, Reuters and FNS agreed 
that Reuters would not sell news transcripts to FNS's customers; 
Reuters would sell FNS-produced news transcripts; Reuters would not 
produce or sell any news transcripts that compete with FNS-produced 
news transcripts for the term of their supply agreement plus five 
years; and Reuters would sell news transcripts at or above the 
minimum price of $500 per month.
    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 effect of these agreements 
was to unreasonably restrain 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 Reuters assisted FNS in 
obtaining a database reseller's agreement to raise the price of the 
reseller's news transcript database. The reseller raised its price 
to assure its contained supply of FNS-produced news transcripts.
    Reuters has signed a proposed consent agreement that prohibits 
it 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 Reuters 
from entering into any agreements with FNS for the supply of news 
transcripts or for the purchase or sale of news transcript customer 
contracts or accounts. Additionally, the proposed consent agreement 
prohibits 

[[Page 52196]]
Reuters from entering into any agreement with FNS that prevents Reuters 
from competing in the production, marketing, or sale of news 
transcripts. Finally, the proposed consent order prohibits Reuters 
from entering into any agreements with any news transcript 
competitor or reseller that fix the resale prices for news 
transcripts.
    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. 95-24758 Filed 10-4-95; 8:45 am]
BILLING CODE 6750-01-M