[Federal Register Volume 64, Number 209 (Friday, October 29, 1999)]
[Notices]
[Pages 58414-58416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28357]


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FEDERAL TRADE COMMISSION

[File No. 991-0319]


VNU N.V.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.


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ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before November 23, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Ave., NW, Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Richard Parker or Ann Malester, FTC/S-
2308, 600 Pennsylvania Ave., NW, Washington, D.C. 20580, (202) 326-2574 
or 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 above-captioned 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 thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for October 22, 1999), on the World Wide Web, at ``http://www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, 
D.C. 20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW, 
Washington, D.C. 20580. Two paper copies of each comment should be 
filed, and should be accompanied, if possible, by a 3\1/2\ inch 
diskette containing an electronic copy of the comment. Such comments or 
views will be considered by the Commission and will be available for 
inspection and 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)).

Analysis of Agreement Containing Consent Orders To Aid Public 
Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from VNU N.V. (``VNU''), which is designed to remedy the 
anticompetitive effects resulting from VNU's acquisition of Nielsen 
Media Research, Inc. (``Nielsen''). Under the terms of the agreement, 
VNU will be required to divest its division, Competitive Media 
Reporting (``CMR''), which supplies advertising expenditure measurement 
services, to a Commission-approved buyer no later than six (6) months 
from the date VNU signed the Consent Agreement. If the sale of CMR is 
not made within six (6) months, the Commission may appoint a trustee to 
divest CMR.
    The proposed Consent Agreement has been placed on the public record 
for thirty (30) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (3) days, the Commission will again review the 
proposed Consent Agreement and the comments received, and will decide 
whether it should withdraw from the proposed Consent Agreement or make 
final the Decision & Order.
    Pursuant to an August 16, 1999 cash tender offer, VNU agreed to 
acquire 100 percent of the issued and outstanding voting securities of 
Nielsen for approximately $2.5 billion. The Commission's Complaint 
alleges that the acquisition, if consummated, would violate Section 7 
of the Clayton Act, as amended, 15 U.S.C. Sec. 18, and Section 5 of the 
Federal Trade Commission Act, as amended, 15 U.S.C. Sec. 45, in the 
market for advertising expenditure measurement services.
    Nielsen, through its Monitor Plus division, and VNU, through its 
CMR division, are the only providers of advertising expenditure 
measurement services in the United States. Both companies track the 
occurrence of commercial advertisements across numerous media, 
including: national and local broadcast television; national and local 
syndication; national and local cable; national and local radio; 
national, local, trade and Sunday magazines; national and local 
newspapers; outdoor advertising; and the Internet. This information is 
typically integrated with other data, such as estimated advertising 
costs and television ratings, in order to create advertising 
expenditure measurement reports. Customers, such as advertising 
agencies, use these reports to create advertising strategies for their 
clients, to study the advertising strategies of their clients' 
competitors, and to monitor what their clients' competitors are 
spending on advertising. Monitor Plus and CMR are the only providers of 
advertising expenditure measurement services across multiple media in 
the United States.
    The United States advertising expenditure measurement services 
market is highly concentrated, and the proposed acquisition would 
combine the only providers of these services. For many years, CMR was 
the only supplier of advertising expenditure measurement services. 
Monitor Plus's entry into this market in the mid-1990's and its 
subsequent head-to-head competition with CMR has provided customers 
with significant price savings and innovations, including better 
methods of tracking the occurrence of advertisements. By eliminating 
competition between the only two competitors in this highly 
concentrated market, the proposed acquisition would allow VNU to 
exercise market power unilaterally, thereby increasing the likelihood 
that purchasers of advertising expenditure measurement services would 
be forced to pay higher prices and that innovation in the advertising 
expenditure measurement services market would decrease.
    Substantial barriers to new entry exist in the advertising 
expenditure measurement services market. A new entrant into this market 
would need to undertake the difficult, expensive, and time-consuming 
process of obtaining access to the technology required for television, 
cable, and radio advertising monitoring; developing or acquiring at 
least two years of historical advertising expenditure data; hiring 
employees to manually track advertising in print and outdoor media; 
establishing a track record for data quality, depth, and accuracy; 
developing software that would permit customers to access and 
manipulate data; creating a knowledgeable sales force; and forming a 
service and support network. In addition, entry into the advertising 
expenditure measurement market is made more unlikely because of long-
term contracts that may reduce the amount of sales opportunities 
available to new entrants. Because of the difficulty of accomplishing 
these tasks, new entry into the advertising expenditure measurement 
services market could not be accomplished in a timely manner and is 
therefore unlikely to deter or counteract the

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anticompetitive effects resulting from the transaction.
    The Consent Agreement effectively remedies the acquisition's 
anticompetitive effects in the advertising expenditure measurement 
services market by requiring VNU to divest its CMR Division. CMR is the 
dominant firm in the market, with an approximate market share of 70 
percent. Pursuant to the Consent Agreement, VNU is required to divest 
CMR no later than six (6) months from the date VNU signed the Consent 
Agreement. In the event that VNU fails to divest CMR within this six-
month time frame, the commission may appoint a trustee to divest CMR. 
The Consent Agreement also ensures that the acquirer of CMR will 
continue to have access to Nielsen's television ratings data by 
extending the duration of CMR's contract with Nielsen for the supply of 
television ratings information.
    In order to ensure that CMR remains a viable, independent 
competitor pending its divestiture, the Commission has issued an Order 
to Hold Separate. Under the Order to Hold Separate, the Commission may 
appoint an Independent Auditor to monitor VNU's compliance with its 
obligation to hold CMR separate and independent. In addition, in order 
to ensure that the acquirer of the divested assets has access to key 
employees currently involved in CMR's advertising expenditure 
measurement services business, the Order to Hold Separate requires VNU 
to provide financial incentives for these individuals to accept 
employment with the acquirer. The Order to Hold Separate also requires 
VNU to provide to the Commission a report of compliance with the 
divestiture provisions of the Order to Hold Separate within thirty (30) 
days following the date the Consent Agreement becomes final, and every 
thirty (30) days thereafter until VNU has completed the required 
divestiture.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official 
interpretation of the Consent Agreement or to modify in any way its 
terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 99-28357 Filed 10-28-99; 8:45 am]
BILLING CODE 6750-01-M