[Federal Register Volume 60, Number 193 (Thursday, October 5, 1995)]
[Notices]
[Pages 52188-52194]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24759]



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FEDERAL TRADE COMMISSION
[File No. 951-0107]


First Data Corporation; Consent Agreement With Analysis to Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Consent Agreement.

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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 
require First Data, a Hackensack, New Jersey corporation to divest 
either the Western Union business acquired through its merger with 
First Financial Management Corporation or its own MoneyGram business to 
an entity that will operate it in competition with the merged company.

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: William J. Baer, Bureau of 
Competition, Federal Trade Commission, H-374, 6th Street & Pennsylvania 
Ave., NW., Washington, DC 20580. (202) 326-2932, or Ann Malester, 
Bureau of Competition, Federal Trade Commission, S-2307, 6th Street & 
Pennsylvania Ave., NW., Washington, DC 20580. (202) 326-2682.

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)).

Agreement Containing Consent Order

    The Federal Trade Commission (``Commission'') having initiated an 
investigation of the proposed acquisition of all of the stock of First 
Financial Management Corporation (``First Financial'') by First Data 
Corporation (``First Data''), and it now appearing that First Data, 
hereinafter sometimes referred to as ``proposed respondent,'' is 
willing to enter into an agreement containing an Order to divest 
certain assets and providing for other relief:
    It is hereby agreed by and between proposed respondent, by its duly 
authorized officers and attorney, and counsel for the Commission that:
    1. Proposed respondent First Data Corporation is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of Delaware with its office and principal place of 
business located at 401 Hackensack Avenue, Hackensack, New Jersey 
07601.
    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 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 
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 Section 2.34 of the 
Commission's Rules, the Commission may, without further notice to the 
proposed respondent, (1) issue its complaint corresponding in form and 
substance with the draft of complaint and its decision containing the 
following Order to divest and to cease and desist in disposition of the 
proceeding, and (2) make information public with respect thereto. When 
so entered, the Order shall have the same force and effect and 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 

[[Page 52189]]
respondent's address 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 the agreement may be used 
to vary or contradict the terms of the Order.
    7. Proposed respondent has read the proposed complaint and Order 
contemplated hereby. Proposed respondent 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

    It is ordered that, as used in this Order (including Appendix I), 
the following definitions shall apply:
    A. ``Respondent'' or ``First Data'' means First Data Corporation, 
its subsidiaries, divisions, groups and affiliates controlled by First 
Data Corporation, and their respective directors, officers, employees, 
agents, and representatives, and their respective successors and 
assigns.
    B. ``First Financial'' means First Financial Management 
Corporation, a corporation providing certain services including 
consumer money wire transfers through Western Union Financial Services, 
Inc.
    C. ``Western Union'' means Western Union Financial Services, Inc., 
a wholly-owned subsidiary of First Financial Management Corporation, 
with its principal office and place of business located at One Mack 
Center Drive, Paramus, New Jersey 07652. Western Union provides and 
markets, among other things, consumer money wire transfer services.
    D. ``Commission'' means the Federal Trade Commission.
    E. ``Acquisition'' means the direct or indirect acquisition of 
control of First Financial by Respondent First Data.
    F. ``Consumer Money Wire Transfer Service'' means the business of 
transferring the right to money using computer or telephone lines from 
one person through the location of a Selling Agent to a different 
person physically present at the location of a Selling Agent available 
to the general public through Selling Agents at retail outlets as 
currently offered by First Data and Western Union. ``Consumer Money 
Wire Transfer Service'' does not include transactions involving only 
one customer utilizing automatic teller machines and other point of 
sale devices, transactions involving debit cards, cash advances 
utilizing credit cards, home banking, prepaid telephone and cash cards, 
money orders, and utility bill payment services and further does not 
include the provision of data processing services to a Consumer Money 
Transfer Service business.
    G. ``Selling Agent'' means a person or business, such as a check 
cashing store, a drug store, a supermarket, a postal service, a bus 
station, or a travel agency, that contracts with Consumer Money Wire 
Transfer Service to provide the Consumer Money Wire Transfer Service to 
customers.
    H. ``MoneyGram Service'' means First Data's Consumer Money Wire 
Transfer Service marketed under the name ``MoneyGram.''
    I. ``MoneyGram Assets'' or ``MoneyGram Business'' include all 
assets, properties, business and goodwill, tangible and intangible, 
related to the sale and marketing of the MoneyGram Service, including, 
but not limited to:
    1. the MoneyGram trade name, trade dress, trade marks, and service 
marks; and,
    2. a group of contracts with Selling Agents to provide the 
MoneyGram Service that provides a network of Selling Agents at least 
comparable to the group of Selling Agents under contract to provide the 
MoneyGram Service on May 1, 1995 other than the American Express Travel 
Related Services Company Travel Services Offices, based on 
characteristics of the Selling Agents such as the countries and cities 
served, number of Selling Agents, and type of outlet; provided, 
however, that the condition regarding the ``number of Selling Agents'' 
is satisfied if the number of Selling Agents is 10,000 or greater.
    J. ``Western Union Service'' means Western Union's Consumer Money 
Wire Transfer Service.
    K. ``Western Union Assets'' or ``Western Union Business'' include 
all assets, properties, business and goodwill, tangible and intangible, 
related to the sale and marketing of the Western Union Service, 
including, but not limited to:
    1. the Western Union trade name, trade dress, trade marks, and 
service marks; and,
    2. all contracts with selling agents to provide the Western Union 
Service.
    L. ``Assets To Be Divested'' means the MoneyGram Assets or the 
Western Union Assets. The definition of ``Assets To Be Divested'' as 
well as any other provision in this order, however, shall not be 
construed to prohibit First Data from divesting both the MoneyGram 
Assets and the Western Union Assets to different acquirers.
    M. ``Marketability, Viability, and Competitiveness'' of the Assets 
To Be Divested means that such assets when used in conjunction with the 
assets of the acquirer or acquirers are capable of providing a Consumer 
Money Wire Transfer Service substantially similar to the Consumer Money 
Wire Transfer Service that the Assets To Be Divested are capable of 
providing at the time of the Acquisition.
    N. ``Non-public information'' means any information not in the 
public domain furnished to First Data in its capacity as a provider of 
data processing services by a Consumer Money Wire Transfer Service 
provider.

II

    It is further ordered that:
    A. Respondent shall divest, absolutely and in good faith, within 
twelve (12) months after the date this Order becomes final, the Assets 
To Be Divested and shall also divest such additional ancillary assets 
and businesses other than money order or utility bill payments 
businesses and effect such arrangements as are necessary to assure the 
Marketability, Viability, and Competitiveness of the Assets To Be 
Divested.
    B. Respondent shall divest the Assets To Be Divested only to an 
acquirer or acquirers that receive the prior approval of the Commission 
and only in a manner that receives the prior approval of the 
Commission. The purpose of the divestiture of the Assets To Be Divested 
is to ensure the continued use of the Assets To Be Divested in the same 
businesses in which the Assets To Be Divested are presently engaged, 
and to remedy the lessening of competition resulting from the 
Acquisition as alleged in the Commission's complaint.
    C. Respondent shall make available to the acquirer or acquirers 
such First Data personnel, assistance and training as the acquirer or 
acquirers reasonably need to transfer technology and know-how, and 
First Data shall continue providing such personnel, assistance and 
training at no additional cost for a period of time sufficient to 
satisfy the acquirer's or acquirers' management that its personnel are 
appropriately trained in the business. However, Respondent shall not be 
required to continue providing such personnel, assistance 

[[Page 52190]]
and training for more than six (6) months after the Assets To Be 
Divested are divested pursuant to this Order.
    D. Pending divestiture of the Assets To Be Divested, Respondent 
shall take such actions as are necessary to maintain the marketability, 
Viability, and Competitiveness of the Assets To Be Divested, and to 
prevent the destruction, removal, wasting, deterioration or impairment 
of any of the Assets To Be Divested except for ordinary wear and tear. 
Provided, however, that nothing in this Paragraph shall be construed to 
prohibit First Data from competing in the ordinary course of business.
    E. Respondent shall comply with all terms of the Agreement to Hold 
Separate, attached to this Order and made a part hereof as Appendix I. 
The Agreement to Hold Separate shall continue in effect until such time 
as Respondent has divested all Assets To Be Divested as required by 
this Order.

III

    It is further ordered that:
    A. If First Data has not divested, absolutely and in good faith, 
and with the Commission's prior approval, the Assets To Be Divested 
within the time period specified in Paragraph II.A. of this Order, the 
Commission may appoint a trustee to divest the Western Union Assets. In 
the event that the Commission or the Attorney General brings an action 
pursuant to Sec. 5(l) of the Federal Trade Commission Act, 15 U.S.C. 
Sec. 45(l), or any other statute enforced by the Commission, First Data 
shall consent to the appointment of a trustee in such action. Neither 
the appointment of a trustee nor a decision not to appoint a trustee 
under this Paragraph shall preclude the Commission or the Attorney 
General from seeking civil penalties or any other relief available to 
it, including a court-appointed trustee, pursuant to Sec. 5(l) of the 
Federal Trade Commission Act, or any other statute enforced by the 
Commission, for any failure by the Respondent to comply with this 
Order.
    B. If a trustee is appointed by the Commission or a court pursuant 
to Paragraph III. A. of this Order, Respondent shall consent to the 
following terms and conditions regarding the trustee's powers, duties, 
authority, and responsibilities:
    1. The Commission shall select the trustee, subject to the consent 
of Respondent, which consent shall not be unreasonably withheld. The 
trustee shall be a person with experience and expertise in acquisitions 
and divestitures. If Respondent has not opposed, in writing, including 
the reasons for opposing, the selection of any proposed trustee within 
ten (10) days after notice by the staff of the Commission to Respondent 
of the identity of any proposed trustee, Respondent shall be deemed to 
have consented to the selection of the proposed trustee.
    2. Subject to the prior approval of the Commission, the trustee 
shall have the exclusive power and authority to divest the Western 
Union Assets.
    3. Within ten (10) days after appointment of the trustee, 
Respondent shall execute a trust agreement that, subject to the prior 
approval of the Commission and, in the case of a court-appointed 
trustee, of the court, transfers to the trustee all rights and powers 
necessary to permit the trustee to effect the divestiture required by 
this Order.
    4. The trustee shall have twelve (12) months from the date the 
Commission approves the trust agreement described in Paragraph III. B. 
3. to accomplish the divestiture of the Western Union Assets, which 
shall be subject to the prior approval of the Commission. If, however, 
at the end of the twelve (12) month period, the trustee has submitted a 
plan of divestiture or believes that divestiture can be achieved within 
a reasonable time, the divestiture period may be extended by the 
Commission, or, in the case of a court-appointed trustee, by the court; 
provided, however, the Commission may extend this period only two (2) 
times.
    5. The trustee shall have full and complete access to the 
personnel, books, records and facilities related to the Western Union 
Assets or to any other relevant information, as the trustee may 
request. Respondent shall develop such financial or other information 
as such trustee may request and shall cooperate with the trustee. 
Respondent shall take no action to interfere with or impede the 
trustee's accomplishment of the divestitures. Any delays in divestiture 
caused by Respondent shall extend the time for divestiture under this 
Paragraph in an amount equal to the delay, as determined by the 
Commission or, for a court-appointed trustee, by the court.
    6. The trustee shall use his or her best efforts to negotiate the 
most favorable price and terms available in each contract that is 
submitted to the Commission, subject to Respondent's absolute and 
unconditional obligation to divest at no minimum price. The divestiture 
shall be made in the manner and to the acquirer or acquirers as set out 
in Paragraph II. of this Order; provided, however, if the trustee 
receives bona fide offers from more than one acquiring entity, and if 
the Commission determines to approve more than one such acquiring 
entity, the trustee shall divest to the acquiring entity or entities 
selected by Respondent from among those approved by the Commission.
    7. The trustee shall serve, without bond or other security, at the 
cost and expense of Respondent, on such reasonable and customary terms 
and conditions as the Commission or a court may set. The trustee shall 
have the authority to employ at the cost and expense of Respondent, 
such consultants, accountants, attorneys, investment bankers, business 
brokers, appraisers, and other representatives and assistants as are 
necessary to carry out the trustee's duties and responsibilities. The 
trustee shall account for all monies derived from the sale and all 
expenses incurred. After approval by the Commission and, in the case of 
a court-appointed trustee, by the court, of the account of the trustee, 
including fees for his or her services, all remaining monies shall be 
paid at the direction of the Respondent, and the trustee's power shall 
be terminated. The trustee's compensation shall be based at least in 
significant part on a commission arrangement contingent on the 
trustee's divesting the Western Union Assets.
    8. Respondent shall indemnify the trustee and hold the trustee 
harmless against any losses, claims, damages, liabilities, or expenses 
arising out of, or in connection with, the performance of the trustee's 
duties, including all reasonable fees of counsel and other expenses 
incurred in connection with the preparation for, or defense of any 
claim, whether or not resulting in any liability, except to the extent 
that such liabilities, losses, damages, claims, or expenses result from 
misfeasance, gross negligence, willful or wanton acts, or bad faith by 
the trustee.
    9. If the trustee ceases to act or fails to act diligently, a 
substitute trustee shall be appointed in the same manner as provided in 
this Paragraph of this Order.
    10. The Commission or, in the case of a court-appointed trustee, 
the court, may on its own initiative or at the request of the trustee 
issue such additional orders or directions as may be necessary or 
appropriate to accomplish the divestiture required by this Order.
    11. The trustee shall have no obligation or authority to operate or 
maintain the Western Union Assets.
    12. The trustee shall report in writing to Respondent and the 
Commission every thirty (30) days concerning the trustee's efforts to 
accomplish divestiture.

[[Page 52191]]


IV

    It is further ordered that if First Data divests the MoneyGram 
Assets pursuant to Paragraph II. of this Order, First Data shall not 
enter into any Consumer Money Wire Transfer Service contract with any 
Selling Agent who is under contract to provide the MoneyGram Service at 
the time of the divestiture; provided, however, that First Data may 
enter into such a Consumer Money Wire Transfer Service contract (i) 
after the time the Selling Agent's contract with First Data would have 
expired had the divestiture not occurred, determined without regard to 
any contract extension or renewal that could occur after the date of 
the divestiture, (ii) if the contract is terminated in accordance with 
its terms other than as may be permitted as a result of the divestiture 
of the MoneyGram Assets or (iii) if the First Data Consumer Money Wire 
Transfer Service being provided is a transfer service utilizing 
automatic teller machines or any other point of sale device, and the 
MoneyGram Service contract upon its terms would not have barred the 
Selling Agent from entering into such a contract.

V

    It is further ordered that nothing in this Order shall be construed 
as prohibiting First Data from entering into agreements with any 
Consumer Money Wire Transfer Service provider, including the acquirer 
or acquirers of the MoneyGram Business and the Western Union Business, 
for the provision of data processing services provided that:
    A. Any such agreement entered into within eighteen (18) months of 
the date of the divestiture does not run for a period of more than two 
years;
    B. No First Data officer, employee or agent who is involved in 
providing First Data's Consumer Money Wire Transfer Service receives 
non-public information of any other Consumer Money Wire Transfer 
Service provider;
    C. First Data uses any non-public information obtained by First 
Data only in First Data's capacity as a provider of data processing 
services; and
    D. First Data delivers a copy of this Order to each officer, 
employee or agent involved in marketing First Data's Consumer Money 
Wire Transfer Service or in providing data processing to any other 
Consumer Money Wire Transfer Service provider prior to First Data's 
obtaining any non-public information relating to the provider's 
business.

VI

    It is further ordered that:
    A. Within sixty (60) days after the date this Order becomes final 
and every sixty (60) days thereafter until Respondent has fully 
complied with the provision of Paragraphs II. and III. of this Order, 
Respondent shall submit to the Commission a verified written report 
setting forth in detail the manner and form in which it intends to 
comply, is complying, and has complied with Paragraphs II. and III. of 
this Order. Respondent shall include in its compliance reports, among 
other things that are required from time to time, a full description of 
the efforts being made to comply with Paragraphs II. and III. of the 
Order, including a description of all substantive contacts or 
negotiations for the divestiture and the identity of all parties 
contacted. Respondent shall include in its compliance reports copies of 
all written communications to and from such parties, all internal 
memoranda, and all reports and recommendations concerning divestiture.
    B. One (1) year from the date this Order becomes final, annually 
for the next nine (9) years on the anniversary of the date this Order 
becomes final, and at such other times as the Commission may require, 
Respondent shall file a verified written report with the Commission 
setting forth in detail the manner and form in which it has complied 
and is complying with Paragraphs IV. and V. of this Order.

VII

    It is further ordered that Respondent shall 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 the corporation that may affect 
compliance obligations arising out of this Order.

VIII

    It is further ordered that, for the purpose of determining or 
securing compliance with this Order, subject to any legally recognized 
privilege, and upon written request with reasonable notice to First 
Data made to its General Counsel, Respondent shall permit any duly 
authorized representative of the Commission.
    A. Access during office hours of First Data and in the presence of 
counsel, to inspect and copy all books, ledgers, accounts, 
correspondence, memoranda and other records and documents in the 
possession or under the control of Respondent relating to any matters 
contained in this Order; and
    B. Upon five days' notice to Respondent and without restraint or 
interference from it, to interview officers, director, or employees of 
Respondent, who may have counsel present regarding such matters.

Appendix I

Agreement to Hold Separate

    This Agreement to Hold Separate (the ``Agreement'') is by and 
between First Data Corporation (``First Data''), a corporation 
organized, existing, and doing business under and by virtue of the 
laws of the State of Delaware, with its office and principal place 
of business at 401 Hackensack Avenue, Hackensack, New Jersey 07601; 
and the Federal Trade Commission (``the Commission''), an 
independent agency of the United States Government, established 
under the Federal Trade Commission Act of 1914, 15 U.S.C. 41, et 
seq. (collectively, the ``Parties'').

Premises

    Whereas, First Data has proposed to acquire, directly or 
indirectly, all of the voting stock or substantially all of the 
assets of First Financial Management Corporation (``First 
Financial''), (hereinafter ``Acquisition''); and
    Whereas, First Data, with its principal office and place of 
business located at 401 Hackensack Avenue, Hackensack, New Jersey 
07601, provides and markets, among other things, Consumer Money Wire 
Transfer Services; and
    Whereas, First Financial, with its principal office and place of 
business located at 3 Corporate Square, Suite 700, Atlanta, Georgia, 
30329, provides and markets, among other things, Consumer Money Wire 
Transfer Services; and
    Whereas, the Commission is now investigating the Acquisition to 
determine whether it would violate any of the statutes enforced by 
the Commission; and
    Whereas, if the Commission accepts the attached Agreement 
Containing Consent Order (``Consent Order''), the Commission must 
place it on the public record for a period of at least sixty (60) 
days and may subsequently withdraw such acceptance pursuant to the 
provisions of Section 2.34 of the Commission's Rules; and
    Whereas, the Commission is concerned that if an understanding is 
not reached, preserving the status quo ante of the MoneyGram 
Business during the period prior to the final acceptance of the 
Consent Order by the Commission (after the 60-day public notice 
period), divestiture resulting from any proceeding challenging the 
legality of the Acquisition might not be possible, or might be less 
than an effective remedy; and
    Whereas, the Commission is concerned that if the Acquisition is 
consummated, it will be necessary to preserve the Commission's 
ability to require the divestiture of the Assets To Be Divested as 
described in Paragraph I. of the Consent Order and the Commission's 
right to have the MoneyGram Business continued as a viable 
competitor; and
    Whereas, the purpose of the Agreement and the Consent Order is:

[[Page 52192]]

    1. To preserve the viability of the MoneyGram Business pending 
the divestiture of the Assets To Be Divested as a viable and ongoing 
enterprise,
    2. To remedy any anticompetitive effects of the Acquisition, and
    3. To preserve the MoneyGram Business as an ongoing and 
competitive Consumer Money Wire Transfer Service until divestiture 
is achieved; and
    Whereas, First Data's entering into this Agreement shall in no 
way be construed as an admission by First Data that the Acquisition 
is illegal; and
    Whereas, First Data understands that no act or transaction 
contemplated by this Agreement shall be deemed immune or exempt from 
the provisions of the antitrust laws or the Federal Trade Commission 
Act by reason of anything contained in this Agreement.
    Now, therefore, the parties agree, upon the understanding that 
the Commission has not yet determined whether the Acquisition will 
be challenged, and in consideration of the Commission's agreement 
that, at the time it accepts the Consent Order for public comment it 
will grant early termination of the Hart-Scott-Rodino waiting 
period, and unless the Commission determines to reject the Consent 
Order, it will not seek further relief from First Data with respect 
to the Acquisition, except that the Commission may exercise any and 
all rights to enforce this Agreement to Hold Separate and the 
Consent Order to which it is annexed and made a part thereof, and in 
the event the required divestiture is not accomplished, to appoint a 
trustee to seek divestiture of the Western Union Assets pursuant to 
the Consent Order, as follows:
    1. First Data agrees to execute and be bound by the attached 
Consent Order.
    2. First Data agrees that from the date this Agreement is 
accepted until the earliest of the dates listed in subparagraphs 
2.a. - 2.b., it will comply with the provisions of Paragraph 3. of 
this Agreement:
    a. three business days after the Commission withdraws its 
acceptance of the Consent Order pursuant to the provisions of 
Section 2.34 of the Commission's rules;
    b. the day after the divestiture required by the Consent Order 
has been completed.
    3. To ensure the complete independence and viability of the 
MoneyGram Business and to assure that no competitive information is 
exchanged between the MoneyGram Business and First Data, First Data 
shall hold the MoneyGram Business separate and apart on the 
following terms and conditions:
    a. First Data will appoint three individuals to manage and 
maintain the MoneyGram Business. These individuals (``the management 
team'') shall manage the MoneyGram Business independently of the 
management of First Data's other businesses. The individuals on the 
management team shall not be involved in any way in the marketing, 
selling or management of any other First Data business, including 
the Western Union Business.
    b. The management team, in its capacity as such, shall report 
directly and exclusively to an independent auditor/manager, to be 
appointed by First Data. The independent auditor/manager shall have 
expertise in management and marketing. The independent auditor/
manager shall have exclusive control over the operations of the 
MoneyGram Business, with responsibility for the management of the 
MoneyGram Business and for maintaining the independence of that 
business.
    c. First Data shall not exercise direction or control over, or 
influence directly or indirectly the independent auditor/manager or 
the management team or any of its operations relating to the 
operations of the MoneyGram Business; provided, however, that First 
Data may exercise only such direction and control over the 
independent auditor/manager, management team and MoneyGram Business 
is necessary to assure compliance with this Agreement and with all 
applicable laws.
    d. First Data shall maintain the Marketability, Viability, and 
Competitiveness of the MoneyGram Assets and shall not sell, 
transfer, encumber (other than in the normal course of business), or 
otherwise impair their Marketability, Viability or Competitiveness.
    e. Except for the management team, sales and marketing employees 
involved in the MoneyGram Business, and support service employees 
involved in the MoneyGram Business, such as Human Resource, Legal, 
Tax, Accounting, Insurance, and Internal Audit employees, First Data 
shall not permit any other First Data employee, officer, or director 
to be involved in the management of the MoneyGram Business. Sales 
and marketing employees involved in the MoneyGram Business, shall 
not be involved in any other First Data business, including the 
Western Union Business. Support service employees involved in the 
MoneyGram Business shall not be involved in the Western Union 
Business.
    f. Except as required by law, and except to the extent that 
necessary information is exchanged in the course of evaluating the 
Acquisition, defending investigations or litigation, or negotiating 
agreements to divest assets, First Data, other than sales and 
marketing employees involved in the MoneyGram Business, or support 
service employees involved in the MoneyGram Business, shall not 
receive or have access to, or the use of, any material confidential 
information about the MoneyGram Business, the activities of the 
management team, sales and marketing employees involved in the 
MoneyGram Business, or support service employees involved in the 
MoneyGram Business in managing that business not in the public 
domain, nor shall the management team, sales and marketing employees 
involved in the MoneyGram Business, or support service employees 
involved in the MoneyGram Business receive or have access to, or the 
use, any material confidential information about the Western Union 
Business or the activities of First Data in managing the Western 
Union Business not in the public domain. Any such information that 
is obtained pursuant to this subparagraph shall be used only for the 
purpose set forth in this subparagraph. (``Material confidential 
information,'' as used herein, means competitively sensitive or 
proprietary information not independently known to:
    (a) First Data, with regard to the MoneyGram Business, from 
sources other than the management ream, sales and marketing 
employees involved in the MoneyGram Business, or support service 
employees involved in the MoneyGram Business; or
    (b) the management team, sales and marketing employees involved 
in the MoneyGram Business, or support service employees involved in 
the MoneyGram Business with regard to the Western Union Business and 
includes but is not limited to customer lists, price lists, 
marketing methods, patents, technologies, processes, or other trade 
secrets.)
    g. First Data shall not change the composition of the management 
team unless the independent auditor/manager consents. The 
independent auditor/manager shall have the power to remove members 
of the management team and to require First Data to appoint 
replacement members to the management team in the same manner as 
provided in Paragraph 3.a. of this Agreement to Hold Separate.
    h. First Data shall circulate to all its employees involved with 
the MoneyGram Business, Western Union Business, or the data 
processing services provided to either the MoneyGram or Western 
Union Businesses, and appropriately display, a notice of this Hold 
Separate Agreement and Consent Order in the form attached hereto as 
Attachment A.
    i. First Data shall make available for use in the MoneyGram 
Business until divestiture of the Assets To Be Divested is 
accomplished an amount of money for advertising and trade promotion 
of the MoneyGram Service not lower than $24 million annually, with 
no less than $10 million for any two consecutive quarters. First 
Data shall pay all direct costs and indirect overheads for the 
MoneyGram Business. The MoneyGram Business shall not be charged with 
the compensation and expenses of the independent auditor/manager.
    j. First Data shall make available for use in the MoneyGram 
Business until divestiture of the Assets To Be Divested an amount of 
money needed to provide an additional 20 percent sales commission to 
the MoneyGram Business sales force on all MoneyGram agent renewals 
and MoneyGram agent recruitments above and beyond the 1995 sales 
commission rate for MoneyGram agent renewals and MoneyGram agent 
recruitments.
    k. The independent auditor/manager shall serve at the cost and 
expense of First Data. First Data shall indemnify the independent 
auditor/manager against any losses or claims of any kind that might 
arise out of his or her involvement under this Agreement to Hold 
Separate, except to the extent that such losses or claims result 
from misfeasance, gross negligence, willful or wanton acts, or bad 
faith by the independent auditor/manager.
    l. If the independent auditor/manager ceases to act or fails to 
act diligently, a substitute auditor/manager shall be appointed in 
the same manner as provided in Paragraph 3.b. of this Agreement to 
Hold Separate.
    m. The independent auditor/manager shall have access to and be 
informed about all 

[[Page 52193]]
companies who inquire about, seek or propose to buy the MoneyGram 
Assets. First Data may require the independent auditor/manager to 
sign a confidentiality agreement prohibiting the disclosure of any 
material confidential information gained as a result of his or her 
role as independent auditor/manager to anyone other than the 
Commission.
    n. All material transactions, out of the ordinary course of 
business and not precluded by subparagraphs 3.a.-3.n. hereof, shall 
be subject to a majority vote of the management team. In case of a 
tie, the independent auditor/manager shall cast the deciding vote.
    o. The independent auditor/manager shall report in writing to 
the Commission every thirty (30) days concerning the independent 
auditor/manager's efforts to accomplish the purposes of this 
Agreement to Hold Separate.
    4. Should the Federal Trade Commission seek in any proceeding to 
compel First Data to divest itself of the MoneyGram Assets or the 
Western Union Assets, or to seek any other equitable relief, First 
Data shall not raise any objection based on the expiration of the 
applicable Hart-Scott-Rodino Antitrust Improvements Act waiting 
period or the fact that the Commission has permitted the 
Acquisition. First Data also waives all rights to contest the 
validity of this Agreement.
    5. For the purpose of determining or securing compliance with 
this Agreement, subject to any legally recognized privilege, and 
upon written request with reasonable notice to First Data made to 
its General Counsel, First Data shall permit any duly authorized 
representative or representatives of the Commission:
    a. Access during the office hours of First Data and in the 
presence of counsel to inspect and copy all books, ledgers, 
accounts, correspondence, memoranda, and other records and documents 
in the possession or under the control of First Data relating to 
compliance with this Agreement; and
    b. Upon five days' notice to First Data, and without restraint 
or interference from it, to interview officers or employees of First 
Data, who may have counsel present, regarding any such matters.
    6. This Agreement shall not be binding until approved by the 
Commission.

Attachment A

Notice of Divestiture and Requirement for Confidentiality

    First Data Corporation (``First Data'') has entered into Consent 
Agreement and Agreement To Hold Separate with the Federal Trade 
Commission relating to the divestiture of the MoneyGram Business or 
the Western Union Business. Until after the Commission's Order 
becomes final and First Data's interest in either the MoneyGram 
Business or the Western Union Business is divested, the MoneyGram 
Business must be managed and maintained as a separate, ongoing 
business, independent of all other First Data businesses and 
independent of Western Union Business. All competitive information 
relating to the MoneyGram Business, except information received by 
First Data in connection with the provision of data processing 
services to the MoneyGram Business as described in and protected by 
the confidentiality provision of Paragraph V. of the Consent Order, 
must be retained and maintained by the persons involved in the 
MoneyGram Business on a confidential basis and such persons shall be 
prohibited from providing, discussing, exchanging, circulating, or 
otherwise furnishing any such information to or with any other 
person whose employment involves any other First Data business, 
including the Western Union Business. Similarly, all such persons 
involved in the Western Union Business shall be prohibited from 
providing, discussing, exchanging, circulating or otherwise 
furnishing competitive information about such business to or with 
any person whose employment involves the MoneyGram business.
    Any violation of the Consent Agreement or the Agreement to Hold 
Separate, incorporated by reference as part of the Consent Order, 
may subject First Data to civil penalties and other relief as 
provided by law.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, 
subject to final approval, an agreement containing a proposed 
consent order from First Data Corporation (``First Data''), under 
which First Data would divest either the MoneyGram or Western Union 
consumer money wire transfer business.
    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 days, the Commission will again review the 
agreement and the comments received, and will decide whether it 
should withdraw from the agreement or make final the agreement's 
proposed Order.
    On June 13, 1995, First Data and First Financial Management 
Corporation (``First Financial'') agreed to merge in a stock swap 
valued at $6.7 billion. Under the proposed agreement, First 
Financial shareholders would receive 1.5859 shares of First Data 
stock for each share of First Financial.
    The proposed complaint alleges that the proposed merger, if 
consummated, would constitute a violation of Section 7 of the 
Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the FTC Act, 
as amended, 15 U.S.C. 45, in the market for consumer money wire 
transfer services. A consumer money wire transfer is a unique method 
of transferring cash between two people in different geographic 
locations that is quick, secure and convenient to use. First Data 
currently provides consumer money wire transfers through its 
MoneyGram business. First Financial currently provides consumer 
money wire transfers through its subsidiary, Western Union Financial 
Services, Inc. These two companies are currently the only two 
domestic consumer money wire transfer services. No potential entrant 
is well-situated to overcome the high barriers to entry and deter or 
counteract the anticompetitive effects of the proposed merger. As a 
consequence, the combination of these two companies is likely to 
result in a monopoly and lead to anticompetitive effects such as 
higher prices and reduced services in the United States consumer 
money transfer market.
    The proposed Consent Order would remedy the alleged violation by 
replacing the lost competition that would result from the merger of 
First Data and First Financial. The proposed Consent Order provides 
that, within twelve (12) months after the date the Order becomes 
final, First Data shall divest either the consumer money wire 
transfer assets of MoneyGram or those of Western Union. If First 
Data is unable to divest these assets during the allotted time 
period, then a trustee may be appointed to divest the Western Union 
assets within a (12) month period. If, at the end of the twelve 
month period, the trustee has submitted a plan of divestiture or 
believes that divestiture can be achieved within a reasonable time, 
the time period for divestiture can be extended by the Commission, 
or, in the case of a court-appointed trustee, by the court. The 
Commission, however, may extend this period only two (2) times.
    A Hold Separate Agreement signed by First Data provides that 
until the MoneyGram or Western Union consumer money wire transfer 
assets are divested, the MoneyGram assets will be operated 
independently of the Western Union assets. Under the provisions of 
the Order within sixty (60) days following the date this Order 
becomes final, and every sixty (60) days thereafter until First Data 
has completely divested its interest in either the MoneyGram or 
Western Union assets.
    The Order also provides that, if First Data divests the 
MoneyGram assets, First Data would then be prohibited from entering 
into a contract with any selling agent who is under contract to 
provide the MoneyGram service at the time of the divestiture. 
However, the Order does permit First Data to enter into a contract 
with such an agent after the agent's contract with First Data would 
have expired absent the divestiture.
    The Order expressly allows First Data to supply data processing 
services to other consumer money wire transfer suppliers, provided 
that it shield any First Data employee who is involved in providing 
First Data's consumer money wire transfer provider. This provision 
will allow competing consumer money wire transfer companies to use 
First Data's data processing service while preventing the 
facilitation of collusion that could occur as a result of the 
transfer of proprietary information from other consumer money wire 
transfer providers to First Data, through its role as a data 
processor.
    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 agreement and proposed Order or to modify in 
any way their terms.
Donald S. Clark,
Secretary.

Statement of Commissioner Christine A. Varney, Merger of First 
Financial Management Corp. and First Data Corp. [File No. 951-0107]

    The First Financial/First Data merger represents another 
milestone in the fast-

[[Page 52194]]
paced development of electronic payment systems. While combinations 
such as this may have efficiency driven, pro-competitive effects, I 
remain concerned about increased concentration in the merchant 
acquirer services industry. This market is growing dramatically, and 
is increasingly central to back-end processing of credit card 
purchases. I expect that we will soon see additional acquisitions in 
the merchant acquirer services industry and, in that light, I have 
asked the Staff of the Commission to continue to monitor the 
competitive situation in this evolving market.

[FR Doc. 95-24759 Filed 10-4-95; 8:45 am]
BILLING CODE 6750-01-M