Reed Elsevier NV, Reed Elsevier PLC, Reed Elsevier Group plc, Reed Elsevier Inc., ChoicePoint Inc., ChoicePoint Services Inc., and ChoicePoint Government Services LLC; Analysis of Agreement Containing Consent Order to Aid Public Comment, 63711-63713 [E8-25400]
Download as PDF
<![CDATA[
Federal Register / Vol. 73, No. 208 / Monday, October 27, 2008 / Notices
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
Additional information on all bank
holding companies may be obtained
from the National Information Center
website at www.ffiec.gov/nic/.
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than November 21,
2008.
A. Federal Reserve Bank of
Richmond (A. Linwood Gill, III, Vice
President) 701 East Byrd Street,
Richmond, Virginia 23261–4528:
1. Yadkin Valley Financial
Corporation, Elkin, North Carolina, to
acquire 100 percent of the voting shares
of, and thereby merge with American
Community Bancshares, Inc., and
thereby indirectly acquire voting shares
of American Community Bank, Monroe,
North Carolina.
Board of Governors of the Federal Reserve
System, October 22, 2008.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. E8–25510 Filed 10–24–08; 8:45 am]
BILLING CODE 6210–01–S
FEDERAL RESERVE SYSTEM
mstockstill on PROD1PC66 with NOTICES
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies;
Correction
This notice corrects a notice (FR Doc.
E8-24173) published on page 60285 of
the issue for Friday, October 10, 2008.
Under the Federal Reserve Bank of
Kansas City heading, the entry for
Lindoe, Inc., Ordway, Colorado, is
revised to read as follows:
A. Federal Reserve Bank of Kansas
City (Todd Offenbacker, Assistant Vice
President) 1 Memorial Drive, Kansas
City, Missouri 64198–0001:
1. Lindoe, Inc., Ordway, Colorado, to
acquire 51 percent of the voting shares
of Southern Colorado National
Bancorporation, Inc., and thereby
indirectly acquire voting shares of
Southern Colorado National Bank, both
of Pueblo, Colorado.
Comments on this application must
be received by November 6, 2008.
VerDate Aug<31>2005
17:13 Oct 24, 2008
Jkt 217001
Board of Governors of the Federal Reserve
System, October 22, 2008.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. E8–25509 Filed 10–24–08 8:45 am]
BILLING CODE 6210–01–S
FEDERAL TRADE COMMISSION
[File No. 081 0133]
Reed Elsevier NV, Reed Elsevier PLC,
Reed Elsevier Group plc, Reed Elsevier
Inc., ChoicePoint Inc., ChoicePoint
Services Inc., and ChoicePoint
Government Services LLC; Analysis of
Agreement Containing Consent Order
to Aid Public Comment
Federal Trade Commission.
Proposed Consent Agreement.
AGENCY:
ACTION:
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 and the terms of the
consent order—embodied in the consent
agreement—that would settle these
allegations.
Comments must be received on
or before October 29, 2008.
ADDRESSES: Interested parties are
invited to submit written comments.
Comments should refer to ‘‘Reed
Elsevier ChoicePoint, File No. 081
0133,’’ to facilitate the organization of
comments. A comment filed in paper
form should include this reference both
in the text and on the envelope, and
should be mailed or delivered to the
following address: Federal Trade
Commission/Office of the Secretary,
Room 135-H, 600 Pennsylvania Avenue,
N.W., Washington, D.C. 20580.
Comments containing confidential
material must be filed in paper form,
must be clearly labeled ‘‘Confidential,’’
and must comply with Commission
Rule 4.9(c). 16 CFR 4.9(c) (2005).1 The
FTC is requesting that any comment
filed in paper form be sent by courier or
overnight service, if possible, because
U.S. postal mail in the Washington area
and at the Commission is subject to
delay due to heightened security
DATES:
1 The comment must be accompanied by an
explicit request for confidential treatment,
including the factual and legal basis for the request,
and must identify the specific portions of the
comment to be withheld from the public record.
The request will be granted or denied by the
Commission’s General Counsel, consistent with
applicable law and the public interest. See
Commission Rule 4.9(c), 16 CFR 4.9(c).
PO 00000
Frm 00039
Fmt 4703
Sfmt 4703
63711
precautions. Comments that do not
contain any nonpublic information may
instead be filed in electronic form by
following the instructions on the webbased form at (https://
secure.commentworks.com/ftcChoicePoint). To ensure that the
Commission considers an electronic
comment, you must file it on that webbased form.
The Federal Trade Commission Act
(‘‘FTC Act’’) and other laws the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. The Commission will
consider all timely and responsive
public comments that it receives,
whether filed in paper or electronic
form. Comments received will be
available to the public on the FTC
website, to the extent practicable, at
(https://www.ftc.gov/os/public
comments.shtm). As a matter of
discretion, the Commission makes every
effort to remove home contact
information for individuals from the
public comments it receives before
placing those comments on the FTC
website. More information, including
routine uses permitted by the Privacy
Act, may be found in the FTC’s privacy
policy, at (https://www.ftc.gov/ftc/
privacy.shtm)
FOR FURTHER INFORMATION CONTACT:
Brendan McNamara, FTC Bureau of
Competition, 600 Pennsylvania Avenue,
NW, Washington, D.C. 20580, (202) 3263703.
SUPPLEMENTARY INFORMATION: Pursuant
to section 6(f) of the Federal Trade
Commission Act, 38 Stat. 721, 15 U.S.C.
46(f), and § 2.34 of the Commission
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 September 16, 2008), on
the World Wide Web, at (https://
www.ftc.gov/os/2008/09/index.htm). A
paper copy can be obtained from the
FTC Public Reference Room, Room 130H, 600 Pennsylvania Avenue, NW,
Washington, D.C. 20580, either in
person or by calling (202) 326-2222.
Public comments are invited, and may
be filed with the Commission in either
paper or electronic form. All comments
E:\FR\FM\27OCN1.SGM
27OCN1
63712
Federal Register / Vol. 73, No. 208 / Monday, October 27, 2008 / Notices
should be filed as prescribed in the
ADDRESSES section above, and must be
received on or before the date specified
in the DATES section.
Analysis of Agreement Containing
Consent Order to Aid Public Comment
mstockstill on PROD1PC66 with NOTICES
I. Introduction
The Federal Trade Commission
(‘‘Commission’’) has accepted, subject to
final approval, an Agreement
Containing Consent Orders (‘‘Consent
Agreement’’) from Reed Elsevier NV,
Reed Elsevier PLC, Reed Elsevier Group
plc, and Reed Elsevier Inc. (collectively
‘‘Reed Elsevier’’), and ChoicePoint Inc.,
ChoicePoint Services Inc., and
ChoicePoint Government Services LLC
(collectively ‘‘ChoicePoint’’). The
purpose of the proposed Consent
Agreement is to remedy the
anticompetitive effects that would
otherwise result from Reed Elsevier’s
proposed acquisition of ChoicePoint in
the U.S. market for electronic public
records services to law enforcement
customers. Under the terms of the
proposed Consent Agreement, Reed
Elsevier and ChoicePoint are required to
divest assets related to ChoicePoint’s
AutoTrackXP and Consolidated Lead
Evaluation and Reporting (‘‘CLEAR’’)
electronic public records services.
The proposed Consent Agreement has
been placed on the public record for
thirty days to solicit comments from
interested persons. Comments received
during this period will become part of
the public record. After thirty 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, modify it,
or make it final.
Pursuant to an Agreement and Plan of
Merger dated February 20, 2008, Reed
Elsevier has agreed to acquire
ChoicePoint for approximately $4.1
billion (‘‘Proposed Acquisition’’). The
Commission’s complaint alleges that the
Proposed Acquisition, if consummated,
would violate 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, by lessening competition in the
market for electronic public record
services sold to law enforcement
customers in the United States. The
proposed Consent Agreement would
remedy the alleged violations by
replacing the competition that would be
lost in this market as a result of the
Proposed Acquisition.
VerDate Aug<31>2005
17:13 Oct 24, 2008
Jkt 217001
II. The Parties
Reed Elsevier is a worldwide, leading
information services provider and
publisher with headquarters in London,
Amsterdam, and New York. Reed
Elsevier’s LexisNexis division provides
information and risk management
products and services to financial,
business, law enforcement, and
government customers. LexisNexis’s
Risk and Information Analytics Group
(‘‘RIAG’’) provides public records
services and risk management and
information analytics applications
designed to assist customers in
managing risk through fraud detection
and prevention, identity authentication
and verification, and background
screening. Reed Elsevier reported
revenues of 4.6 billion ($9.3 billion) for
2007.
ChoicePoint, headquartered in
Alpharetta, Georgia, is a leading
provider of a variety of services used by
customers to manage economic risk.
ChoicePoint has four primary service
groups: Insurance Services, Screening
and Authentication Services, Business
Services, and Marketing Services. For
2007, ChoicePoint reported revenues of
$982 million.
III. Electronic Public Records Services to
Law Enforcement Customers
Electronic public records
encompasses a wide array of public and
non-public records about individuals
and businesses, including credit header
data, criminal records, motor vehicle
records, property records, and
employment records. Electronic public
records service providers such as
LexisNexis and ChoicePoint compile
these records, either by going directly to
the source or by purchasing these
records from third parties, and present
them to end users via an online, webbased interface.
Law enforcement customers utilize
electronic public records services as an
investigatory tool in complex criminal
investigations, such as combating
terrorism, locating fugitives, and
detecting illegal drug transactions.
Unlike other consumers of electronic
public records services, such as
collections agencies who use these
services for simple and discrete tasks
such as locating an individual, law
enforcement customers use electronic
public records services to uncover
previously unknown information and to
generate leads in their investigations.
Law enforcement customers, therefore,
only work with electronic public
records services providers with the most
comprehensive, up-to-date, and accurate
records available, as deficiencies in the
PO 00000
Frm 00040
Fmt 4703
Sfmt 4703
underlying database could cost them a
critical lead in an investigation. In
addition to demanding the most
complete database of electronic public
records, law enforcement customers
require that the provider have
sophisticated search algorithms,
sometimes called analytics, that identify
and display non-obvious relationships
between records.
The relevant geographic market in
which to assess the impact of the
Proposed Acquisition is the United
States. Market participants indicate that
successful participation in this market
requires an established U.S. sales and
support presence. As a practical matter,
there are no firms serving non-U.S.
customers that a law enforcement
customer located in the United States
could turn to as an alternative.
The market for electronic public
records services to law enforcement
customers is highly concentrated, with
LexisNexis, primarily through its
Accurint for Law Enforcement service,
and ChoicePoint, with its AutoTrackXP
service, accounting for over 80 percent
of this approximately $60 million
market. The Proposed Acquisition
would significantly increase market
concentration and eliminate substantial
competition between the only two
significant suppliers of electronic public
records services to law enforcement
customers in the United States.
The anticompetitive implications of
such a dramatic increase in
concentration are buttressed by
evidence of intense head-to-head
competition that would be lost with the
Proposed Acquisition. Law enforcement
customers have benefitted from the
rivalry between LexisNexis and
ChoicePoint in the form of lower prices,
improved products, and better service
and support. In addition, this fierce
competition prompted ChoicePoint to
introduce CLEAR—a new and advanced
electronic public records service—
designed specifically for law
enforcement customers. Left
unremedied, the Proposed Acquisition
likely would cause anticompetitive
harm by enabling LexisNexis to profit
by unilaterally raising the prices of
electronic public records services to law
enforcement customers, as well as
reducing its incentives to innovate and
develop new services.
New entry or fringe expansion into
the market for the sale of electronic
public records services to law
enforcement customers sufficient to
deter or counteract the competitive
effects of the proposed transaction is
unlikely to occur within two years.
Firms existing in the market would need
to improve their software and
E:\FR\FM\27OCN1.SGM
27OCN1
Federal Register / Vol. 73, No. 208 / Monday, October 27, 2008 / Notices
mstockstill on PROD1PC66 with NOTICES
underlying analytics substantially,
increase the breadth and depth of their
public records data, and overcome the
resistance of many law enforcement
customers to switch to a product that
lacks the track record of effectively
serving the needs of the law
enforcement community in order to
seriously contend for the customers that
currently work with LexisNexis or
ChoicePoint. As a result, new entry or
fringe expansion sufficient to achieve a
significant market impact within two
years is unlikely.
IV. The Consent Agreement
The proposed Consent Agreement
effectively remedies the Proposed
Acquisition’s likely anticompetitive
effects in the market for electronic
public records services to law
enforcement customers. The proposed
Consent Agreement preserves
competition by requiring the divestiture
of assets related to ChoicePoint’s
AutoTrackXP and CLEAR electronic
public records services to Thomson
Reuters Legal Inc. (‘‘West’’) within
fifteen (15) days after the Proposed
Acquisition is consummated.
The Commission is satisfied that West
is a well-qualified acquirer of the
AutoTrackXP and CLEAR assets. West
has the resources, capabilities,
experience, and reputation to ensure
that it will be an effective competitor in
the market for electronic public records
services to law enforcement customers.
West, headquartered in Eagan,
Minnesota, is a subsidiary of Thomson
Reuters, one of the world’s leading
information service providers to the
legal and business community. West
already has a large and experienced
sales force with existing relationships
with many law enforcement agencies
which use West’s legal research
services. With the divested assets, West
will be particularly well-situated to
replicate ChoicePoint’s success and
compete against the combined firm
immediately after the Proposed
Acquisition.
The proposed Consent Agreement
contains several provisions designed to
ensure that the divestiture of the
AutoTrackXP and CLEAR assets to West
is successful. First, the proposed
Consent Agreement requires Reed
Elsevier to provide various transitional
services such as customer service,
billing support, and database and
network maintenance for up to two
years to enable West to compete against
Reed Elsevier immediately following the
divestiture. Second, the proposed
Consent Agreement ensures that Reed
Elsevier will maintain the viability and
marketability of the AutoTrackXP and
VerDate Aug<31>2005
17:13 Oct 24, 2008
Jkt 217001
CLEAR assets prior to the divestiture.
Finally, the proposed Consent
Agreement allows the Commission to
appoint an Interim Monitor to ensure
that Reed Elsevier fulfills all of its
obligations related to the divestiture of
the assets.
In order to ensure that the
Commission remains informed about
the status of the AutoTrackXP and
CLEAR assets pending divestiture, and
about the efforts being made to
accomplish the divestiture, the
proposed Consent Agreement requires
Reed Elsevier to file periodic reports
with the Commission until the
divestiture is accomplished.
The purpose of this analysis is to
facilitate public comment on the
proposed Consent Agreement, and it is
not intended to constitute an official
interpretation of the proposed Consent
Agreement or to modify its terms in any
way.
By direction of the Commission.
Donald S. Clark
Secretary
[FR Doc. E8–25400 Filed 10–24–08: 8:45 am]
BILLING CODE 6750–01–S
GOVERNMENT ACCOUNTABILITY
OFFICE
Medicare Payment Advisory
Commission Nomination Letters
Government Accountability
Office (GAO).
AGENCY:
ACTION:
Notice on letters of nomination.
SUMMARY: The Balanced Budget Act of
1997 established the Medicare Payment
Advisory Commission (MedPAC) and
gave the Comptroller General
responsibility for appointing its
members. For appointments to MedPAC
that will be effective May 1, 2009, I am
announcing the following: Letters of
nomination should be submitted
between January 1 and March 31, 2009,
to ensure adequate opportunity for
review and consideration of nominees
prior to the appointment of new
members.
ADDRESSES:
GAO: 441 G Street, NW., Washington,
DC 20548.
MedPAC: 601 New Jersey Avenue, NW.,
Suite 9000, Washington, DC 20001.
FOR FURTHER INFORMATION CONTACT:
GAO: Office of Public Affairs, (202)
512–4800.
PO 00000
Frm 00041
Fmt 4703
Sfmt 4703
63713
Authority: 42 U.S.C. 1395b–6.
Gene L. Dodaro,
Acting Comptroller General of the United
States.
[FR Doc. E8–25358 Filed 10–24–08; 8:45 am]
BILLING CODE 1610–02–M
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Public Meeting of the President’s
Council on Bioethics
Department of Health and
Human Services, Office of Public Health
and Science, The President’s Council on
Bioethics.
ACTION: Notice.
AGENCY:
SUMMARY: The President’s Council on
Bioethics (Edmund D. Pellegrino, MD,
Chairman) will hold its thirty-fifth
meeting, at which it will discuss three
topics: exercises of conscience in the
practice of the health professions, the
problem of medical futility, and the
future of public bioethics and national
bioethics commissions in the United
States. Subjects discussed at past
Council meetings (although not on the
agenda for the November 2008 meeting)
include: therapeutic and reproductive
cloning, assisted reproduction,
reproductive genetics, neuroscience,
aging retardation, organ transplantation,
personalized medicine, standards for
the determination of death, children and
bioethics, and lifespan-extension among
others. Publications issued by the
Council to date include: Human Cloning
and Human Dignity: An Ethical Inquiry
(July 2002); Beyond Therapy:
Biotechnology and the Pursuit of
Happiness (October 2003); Being
Human: Readings from the President’s
Council on Bioethics (December 2003);
Monitoring Stem Cell Research (January
2004), Reproduction and Responsibility:
The Regulation of New Biotechnologies
(March 2004), Alternative Sources of
Human Pluripotent Stem Cells: A White
Paper (May 2005), Taking Care: Ethical
Caregiving in Our Aging Society
(September 2005), and Human Dignity
and Bioethics: Essays Commissioned by
the President’s Council on Bioethics
(March 2008). Reports are forthcoming
on four topics: controversies in the
determination of death; organ donation,
procurement, allocation, and
transplantation; newborn screening; and
medical care and the common good.
DATES: The meeting will take place
Thursday, November 20, 2008, from 9
a.m. to 5 p.m., ET; and Friday,
November 21, 2008, from 9 a.m. to
noon, ET.
E:\FR\FM\27OCN1.SGM
27OCN1
]]>Agencies
[Federal Register Volume 73, Number 208 (Monday, October 27, 2008)]
[Notices]
[Pages 63711-63713]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25400]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 081 0133]
Reed Elsevier NV, Reed Elsevier PLC, Reed Elsevier Group plc,
Reed Elsevier Inc., ChoicePoint Inc., ChoicePoint Services Inc., and
ChoicePoint Government Services LLC; Analysis of Agreement Containing
Consent Order to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
-----------------------------------------------------------------------
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 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 October 29, 2008.
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Reed Elsevier ChoicePoint, File No. 081
0133,'' to facilitate the organization of comments. A comment filed in
paper form should include this reference both in the text and on the
envelope, and should be mailed or delivered to the following address:
Federal Trade Commission/Office of the Secretary, Room 135-H, 600
Pennsylvania Avenue, N.W., Washington, D.C. 20580. Comments containing
confidential material must be filed in paper form, must be clearly
labeled ``Confidential,'' and must comply with Commission Rule 4.9(c).
16 CFR 4.9(c) (2005).\1\ The FTC is requesting that any comment filed
in paper form be sent by courier or overnight service, if possible,
because U.S. postal mail in the Washington area and at the Commission
is subject to delay due to heightened security precautions. Comments
that do not contain any nonpublic information may instead be filed in
electronic form by following the instructions on the web-based form at
(https://secure.commentworks.com/ftc-ChoicePoint). To ensure that the
Commission considers an electronic comment, you must file it on that
web-based form.
---------------------------------------------------------------------------
\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See Commission Rule 4.9(c),
16 CFR 4.9(c).
---------------------------------------------------------------------------
The Federal Trade Commission Act (``FTC Act'') and other laws the
Commission administers permit the collection of public comments to
consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC website, to the extent practicable,
at (https://www.ftc.gov/os/publiccomments.shtm). As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC website. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at (https://www.ftc.gov/ftc/privacy.shtm)
FOR FURTHER INFORMATION CONTACT: Brendan McNamara, FTC Bureau of
Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, (202)
326-3703.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 of
the Commission 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 September 16, 2008), on the World Wide Web, at (https://
www.ftc.gov/os/2008/09/index.htm). A paper copy can be obtained from
the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW,
Washington, D.C. 20580, either in person or by calling (202) 326-2222.
Public comments are invited, and may be filed with the Commission
in either paper or electronic form. All comments
[[Page 63712]]
should be filed as prescribed in the ADDRESSES section above, and must
be received on or before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order to Aid Public Comment
I. Introduction
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an Agreement Containing Consent Orders (``Consent
Agreement'') from Reed Elsevier NV, Reed Elsevier PLC, Reed Elsevier
Group plc, and Reed Elsevier Inc. (collectively ``Reed Elsevier''), and
ChoicePoint Inc., ChoicePoint Services Inc., and ChoicePoint Government
Services LLC (collectively ``ChoicePoint''). The purpose of the
proposed Consent Agreement is to remedy the anticompetitive effects
that would otherwise result from Reed Elsevier's proposed acquisition
of ChoicePoint in the U.S. market for electronic public records
services to law enforcement customers. Under the terms of the proposed
Consent Agreement, Reed Elsevier and ChoicePoint are required to divest
assets related to ChoicePoint's AutoTrackXP and Consolidated Lead
Evaluation and Reporting (``CLEAR'') electronic public records
services.
The proposed Consent Agreement has been placed on the public record
for thirty days to solicit comments from interested persons. Comments
received during this period will become part of the public record.
After thirty 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, modify it, or make
it final.
Pursuant to an Agreement and Plan of Merger dated February 20,
2008, Reed Elsevier has agreed to acquire ChoicePoint for approximately
$4.1 billion (``Proposed Acquisition''). The Commission's complaint
alleges that the Proposed 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, by lessening competition in the market for electronic public
record services sold to law enforcement customers in the United States.
The proposed Consent Agreement would remedy the alleged violations by
replacing the competition that would be lost in this market as a result
of the Proposed Acquisition.
II. The Parties
Reed Elsevier is a worldwide, leading information services provider
and publisher with headquarters in London, Amsterdam, and New York.
Reed Elsevier's LexisNexis division provides information and risk
management products and services to financial, business, law
enforcement, and government customers. LexisNexis's Risk and
Information Analytics Group (``RIAG'') provides public records services
and risk management and information analytics applications designed to
assist customers in managing risk through fraud detection and
prevention, identity authentication and verification, and background
screening. Reed Elsevier reported revenues of 4.6 billion ($9.3
billion) for 2007.
ChoicePoint, headquartered in Alpharetta, Georgia, is a leading
provider of a variety of services used by customers to manage economic
risk. ChoicePoint has four primary service groups: Insurance Services,
Screening and Authentication Services, Business Services, and Marketing
Services. For 2007, ChoicePoint reported revenues of $982 million.
III. Electronic Public Records Services to Law Enforcement Customers
Electronic public records encompasses a wide array of public and
non-public records about individuals and businesses, including credit
header data, criminal records, motor vehicle records, property records,
and employment records. Electronic public records service providers
such as LexisNexis and ChoicePoint compile these records, either by
going directly to the source or by purchasing these records from third
parties, and present them to end users via an online, web-based
interface.
Law enforcement customers utilize electronic public records
services as an investigatory tool in complex criminal investigations,
such as combating terrorism, locating fugitives, and detecting illegal
drug transactions. Unlike other consumers of electronic public records
services, such as collections agencies who use these services for
simple and discrete tasks such as locating an individual, law
enforcement customers use electronic public records services to uncover
previously unknown information and to generate leads in their
investigations. Law enforcement customers, therefore, only work with
electronic public records services providers with the most
comprehensive, up-to-date, and accurate records available, as
deficiencies in the underlying database could cost them a critical lead
in an investigation. In addition to demanding the most complete
database of electronic public records, law enforcement customers
require that the provider have sophisticated search algorithms,
sometimes called analytics, that identify and display non-obvious
relationships between records.
The relevant geographic market in which to assess the impact of the
Proposed Acquisition is the United States. Market participants indicate
that successful participation in this market requires an established
U.S. sales and support presence. As a practical matter, there are no
firms serving non-U.S. customers that a law enforcement customer
located in the United States could turn to as an alternative.
The market for electronic public records services to law
enforcement customers is highly concentrated, with LexisNexis,
primarily through its Accurint for Law Enforcement service, and
ChoicePoint, with its AutoTrackXP service, accounting for over 80
percent of this approximately $60 million market. The Proposed
Acquisition would significantly increase market concentration and
eliminate substantial competition between the only two significant
suppliers of electronic public records services to law enforcement
customers in the United States.
The anticompetitive implications of such a dramatic increase in
concentration are buttressed by evidence of intense head-to-head
competition that would be lost with the Proposed Acquisition. Law
enforcement customers have benefitted from the rivalry between
LexisNexis and ChoicePoint in the form of lower prices, improved
products, and better service and support. In addition, this fierce
competition prompted ChoicePoint to introduce CLEAR--a new and advanced
electronic public records service--designed specifically for law
enforcement customers. Left unremedied, the Proposed Acquisition likely
would cause anticompetitive harm by enabling LexisNexis to profit by
unilaterally raising the prices of electronic public records services
to law enforcement customers, as well as reducing its incentives to
innovate and develop new services.
New entry or fringe expansion into the market for the sale of
electronic public records services to law enforcement customers
sufficient to deter or counteract the competitive effects of the
proposed transaction is unlikely to occur within two years. Firms
existing in the market would need to improve their software and
[[Page 63713]]
underlying analytics substantially, increase the breadth and depth of
their public records data, and overcome the resistance of many law
enforcement customers to switch to a product that lacks the track
record of effectively serving the needs of the law enforcement
community in order to seriously contend for the customers that
currently work with LexisNexis or ChoicePoint. As a result, new entry
or fringe expansion sufficient to achieve a significant market impact
within two years is unlikely.
IV. The Consent Agreement
The proposed Consent Agreement effectively remedies the Proposed
Acquisition's likely anticompetitive effects in the market for
electronic public records services to law enforcement customers. The
proposed Consent Agreement preserves competition by requiring the
divestiture of assets related to ChoicePoint's AutoTrackXP and CLEAR
electronic public records services to Thomson Reuters Legal Inc.
(``West'') within fifteen (15) days after the Proposed Acquisition is
consummated.
The Commission is satisfied that West is a well-qualified acquirer
of the AutoTrackXP and CLEAR assets. West has the resources,
capabilities, experience, and reputation to ensure that it will be an
effective competitor in the market for electronic public records
services to law enforcement customers. West, headquartered in Eagan,
Minnesota, is a subsidiary of Thomson Reuters, one of the world's
leading information service providers to the legal and business
community. West already has a large and experienced sales force with
existing relationships with many law enforcement agencies which use
West's legal research services. With the divested assets, West will be
particularly well-situated to replicate ChoicePoint's success and
compete against the combined firm immediately after the Proposed
Acquisition.
The proposed Consent Agreement contains several provisions designed
to ensure that the divestiture of the AutoTrackXP and CLEAR assets to
West is successful. First, the proposed Consent Agreement requires Reed
Elsevier to provide various transitional services such as customer
service, billing support, and database and network maintenance for up
to two years to enable West to compete against Reed Elsevier
immediately following the divestiture. Second, the proposed Consent
Agreement ensures that Reed Elsevier will maintain the viability and
marketability of the AutoTrackXP and CLEAR assets prior to the
divestiture. Finally, the proposed Consent Agreement allows the
Commission to appoint an Interim Monitor to ensure that Reed Elsevier
fulfills all of its obligations related to the divestiture of the
assets.
In order to ensure that the Commission remains informed about the
status of the AutoTrackXP and CLEAR assets pending divestiture, and
about the efforts being made to accomplish the divestiture, the
proposed Consent Agreement requires Reed Elsevier to file periodic
reports with the Commission until the divestiture is accomplished.
The purpose of this analysis is to facilitate public comment on the
proposed Consent Agreement, and it is not intended to constitute an
official interpretation of the proposed Consent Agreement or to modify
its terms in any way.
By direction of the Commission.
Donald S. Clark
Secretary
[FR Doc. E8-25400 Filed 10-24-08: 8:45 am]
BILLING CODE 6750-01-S
