UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
- Robert Pitofsky, Chairman
- Sheila F. Anthony
- Mozelle W. Thompson
- Orson Swindle
- Thomas B. Leary
In the Matter of
VNU N.V., a corporation.
Docket No. C-3900
DECISION AND ORDER
The Federal Trade Commission having initiated an investigation of the proposed
acquisition by Respondent VNU N.V. of 100 percent of the voting securities of Nielsen
Media Research, Inc., and Respondent having been furnished thereafter with a copy of a
draft of Complaint that the Bureau of Competition presented to the Commission for its
consideration and which, if issued by the Commission, would charge Respondent with
violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section
5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and
Respondent, its attorneys, and counsel for the Commission having thereafter executed an
Agreement Containing Consent Orders ("Consent Agreement"), containing an
admission by Respondent of all the jurisdictional facts set forth in the aforesaid draft
of Complaint, a statement that the signing of said Consent Agreement is for settlement
purposes only and does not constitute an admission by Respondent that the law has been
violated as alleged in such Complaint, or that the facts as alleged in such Complaint,
other than jurisdictional facts, are true, and waivers and other provisions as required by
the Commission's Rules; and
The Commission having thereafter considered the matter and having determined that it
had reason to believe that Respondent has violated the said Acts, and that a Complaint
should issue stating its charges in that respect, and having thereupon issued its
Complaint and an Order to Hold Separate, and having accepted the executed Consent
Agreement and placed such Consent Agreement on the public record for a period of thirty
(30) days for the receipt and consideration of public comments, now in further conformity
with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the
Commission hereby makes the following jurisdictional findings and issues the following
1. Respondent VNU is a corporation organized, existing and doing business under and by
virtue of the laws of The Netherlands, with its office and principal place of business
located at Ceylonspoort 5-25, 2003 E.A. Haarlem, The Netherlands.
2. The Federal Trade Commission has jurisdiction of the subject matter of this
proceeding and of Respondent, and the proceeding is in the public interest.
IT IS ORDERED that, as used in this order, the following definitions
A. "Respondent" or "VNU" means VNU N.V., its directors, officers,
employees, agents, representatives, successors, and assigns; its subsidiaries, divisions,
groups, and affiliates controlled by VNU, and the respective directors, officers,
employees, agents, representatives, successors, and assigns of each.
B. "Commission" means the Federal Trade Commission.
C. "Competitive Media Reporting Division" or "CMR" means the
division of VNU that collects, manages, stores, delivers, researches, develops, and sells,
among other things, Advertising Expenditure Measurement Services, including, but not
limited to, the following assets used in any of CMR's businesses:
1. all assets, properties, business and goodwill, tangible and intangible;
2. machinery, fixtures, equipment, vehicles, transportation facilities, furniture,
tools and other tangible personal property;
3. all customer lists, vendor lists, catalogs, sales promotion literature, advertising
materials, research materials, technical information, management information systems,
software, inventions, trade secrets, intellectual property, patents, technology, know-how,
specifications, designs, drawings, processes and quality control data;
4. inventory and storage capacity;
5. all rights, titles and interests in and to owned or leased real property, together
with appurtenances, licenses and permits;
6. all rights, titles and interests in and to the contracts entered into in the
ordinary course of business with customers (together with associated bid and performance
bonds), suppliers, sales representatives, distributors, agents, personal property lessors,
personal property lessees, licensors, licensees, consignors and consignees;
7. all rights under warranties and guarantees, express or implied;
8. all books, records, and files;
9. all items of prepaid expense;
10. all rights under the Nielsen Ratings Data License Agreement; and
11. satellite dish receivers, taping equipment for network and satellite feeds,
television data collection equipment, local radio and data collection equipment, and local
field monitoring equipment.
D. "Key Employees" means the key employees
listed in Confidential Appendix I.
E. "Senior Staff Employees" means the senior
staff employees listed in Confidential Appendix I.
F. "Acquisition" means the proposed acquisition
of 100 percent of the voting securities of Nielsen Media Research, Inc. by VNU pursuant to
the Agreement and Plan of Merger dated August 16, 1999.
G. "Advertising Expenditure Measurement
Services" means the collection, management, storage, delivery, research, development
and sale of advertising occurrence and expenditure information collected from any media
source, including, but not limited to: (1) national broadcast television; (2) local
broadcast television; (3) national syndication; (4) local syndication; (5) national cable;
(6) local cable; (7) national radio; (8) local radio; (9) national magazines; (10) local
magazines; (11) trade magazines; (12) Sunday magazines; (13) national newspapers; (14)
local newspapers; (15) outdoor advertising and (16) Internet.
H. "Nielsen Ratings Data License Agreement"
means the license agreement dated December 3, 1996 between Nielsen Media Research, Inc.
and VNU Advertising Expenditure Corp. through its Competitive Media Reporting Division for
the use of Nielsen television ratings data, and attached hereto as Confidential Appendix
I. "Material Confidential Information" means
competitively sensitive or proprietary information not independently known to an entity
from sources other than the entity to which the information pertains, and includes, but is
not limited to, all customer lists, price lists, marketing methods, patents, technologies,
processes, or other trade secrets.
J. "Hold Separate Period" means the time period
during which the Order to Hold Separate is in effect.
IT IS FURTHER ORDERED that:
A. Respondent shall divest CMR at no minimum price,
absolutely and in good faith, within six (6) months from the date the Agreement Containing
Consent Orders is signed by Respondent.
B. Respondent shall divest CMR only to an acquirer that
receives 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 CMR is to ensure the
continued use of CMR in the same business in which CMR is engaged at the time of the
proposed acquisition, and to remedy the lessening of competition resulting from the
proposed acquisition as alleged in the Commission's complaint.
C. Pending divestiture of CMR, Respondent shall take such
actions as are necessary to maintain the viability and marketability of CMR and to prevent
the destruction, removal, wasting, deterioration, or impairment of any of CMR's assets,
except for ordinary wear and tear.
D. No later than the time of the execution of a purchase
agreement between Respondent and a proposed acquirer of CMR, Respondent shall provide the
proposed acquirer with a complete list of all non-clerical, salaried employees of CMR who
have been involved in the collection, management, storage, delivery, research, development
and sale of Advertising Expenditure Measurement Services at any time from January 1, 1999
until the date of the purchase agreement. Respondent shall also provide the proposed
acquirer with a complete list of all independent contractors to CMR involved in the
collection, management, storage, delivery, research, development and sale of Advertising
Expenditure Measurement Services at any time from January 1, 1999 until the date of the
purchase agreement. The lists shall state each individual's name, position or positions
held from January 1, 1999 until the date of the purchase agreement, address, telephone
number, and a description of the duties and work performed by the individual in connection
with the collection, management, storage, delivery, research, development and sale of
Advertising Expenditure Measurement Services.
E. Respondent shall provide the proposed acquirer with an
opportunity to inspect the personnel files and other documentation relating to individuals
identified in Paragraph II. D. of this order to the extent permissible under applicable
laws, at the request of the proposed acquirer any time after the execution of the purchase
F. Respondent shall provide to all CMR employees during
the Hold Separate Period a continuation of all employee benefits currently offered to such
employees. In addition, Respondent shall provide to Key Employees of CMR incentives to
accept employment with the Commission-approved acquirer at the time of the divestiture.
Such incentives shall include a bonus for each Key Employee, equal to 20 percent of the
employee's annual salary and commissions (including any other bonuses) as of the date this
order becomes final, who agrees to accept an offer of employment from the
Commission-approved acquirer, payable by Respondent upon the beginning of the employee's
employment by the Commission-approved acquirer. In addition, Respondent shall provide to
Senior Staff Employees of CMR incentives to accept employment with the Commission-approved
acquirer at the time of the divestiture. Such incentives shall include a bonus for each
Senior Staff Employee, equal to 25 percent of the employee's annual salary and commissions
(including any other bonuses) as of the date this order becomes final, who agrees to
accept an offer of employment from the Commission-approved acquirer, payable by Respondent
upon the beginning of the employee's employment by the Commission-approved acquirer.
G. For a period of one (1) year commencing on the date of
the individual's employment by the Commission-approved acquirer, Respondent shall not
employ any of the Key Employees who have been offered employment with the
Commission-approved acquirer, unless the individual's employment has been terminated by
IT IS FURTHER ORDERED that:
A. If VNU has not divested, absolutely and in good faith
and with the Commission's prior approval, CMR within six (6) months from the date
Respondent signs the Consent Agreement, the Commission may appoint a trustee to divest
CMR. In the event that the Commission or the Attorney General brings an action pursuant to
§ 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l),
or any other statute enforced by the Commission, VNU 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 § 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
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
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 CMR.
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, which shall be subject to the prior approval of the
Commission. If, however, 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 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 CMR 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
divestiture. 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
expeditiously at no minimum price. The divestiture shall be made in the manner and to the
acquirer 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 selected by Respondent from among those approved by the Commission;
provided further, however, that Respondent shall select such entity within five (5)
business days of receiving notification of the Commission's approval.
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 divestiture 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 CMR.
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
Paragraph III. A. 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. In the event that the trustee determines that he or
she is unable to divest CMR in a manner consistent with the Commission's purpose as
described in Paragraph II. of this order, the trustee may divest additional ancillary
assets of Respondent related to CMR and effect such arrangements as are necessary to
satisfy the requirements of this order.
12. The trustee shall have no obligation or authority to
operate or maintain CMR.
13. The trustee shall report in writing to Respondent and
the Commission every sixty (60) days concerning the trustee's efforts to accomplish
IT IS FURTHER ORDERED that Respondent
shall, no later than the date on which it accomplishes the divestiture, extend the Nielsen
Ratings Data License Agreement, attached hereto as Confidential Appendix II, for a minimum
period of five (5) years commencing on the date CMR is divested, and shall not terminate
or suspend the Nielsen Ratings License Agreement, or suspend performance under that
Agreement, for any reason prior to the expiration of the five (5) year minimum period. The
Nielsen Ratings data referred to in the Nielsen Ratings Data License Agreement shall
include all Nielsen Ratings data provided to any third party licensed to process and
redistribute Nielsen Ratings data. Provided, however, that Respondent may
only charge CMR the annual license fee specified in Paragraphs V. A. 1(a)(ii), V. A.
1(b)(ii) and V. A. 1(c)(ii) of the Nielsen Ratings Data License Agreement, and may not
charge any license fees that are based on CMR's revenues. It is further ordered that
Respondent shall not receive any Material Confidential Information from CMR pursuant to
the Nielsen Ratings Data License Agreement.
IT IS FURTHER ORDERED that:
A. Within thirty (30) days after the date this order
becomes final and every thirty (30) days thereafter until Respondent has fully complied
with the provisions 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 and with the Order to Hold Separate. 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. The final compliance report
required by this Paragraph V. A. shall include a statement that the divestiture has been
accomplished in the manner approved by the Commission and shall include the date the
divestiture was accomplished.
B. One year from the date of divestiture of CMR and
annually thereafter until the order terminates, Respondent shall file a verified written
report to the Commission setting forth in detail the manner in which it has complied and
is complying with this order.
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, 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.
IT IS FURTHER ORDERED that for the
purposes of determining or securing compliance with this order, and subject to any legally
recognized privilege, and upon written request with reasonable notice to Respondent made
to its principal United States office, Respondent shall permit any duly authorized
representatives of the Commission:
A. Access, during office hours of Respondent and in the
presence of counsel, to all facilities, and access to inspect and copy all books, ledgers,
accounts, correspondence, memoranda, and all other records and documents in the possession
or under the control of the Respondent relating to compliance with this order; and
B. Upon five (5) days' notice to Respondent and without
restraint or interference from Respondent, to interview officers, directors, or employees
of Respondent, who may have counsel present, regarding such matters.
IT IS FURTHER ORDERED that this order
shall terminate five (5) years after the divestiture required in Paragraph II. A. of this
order has been accomplished.
By the Commission, Commissioner Leary not participating.
Donald S. Clark
ISSUED: December 3, 1999