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

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.

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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