[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.
[[Page 58415]]
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
[[Page 58416]]
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