FTC Requires Dun & Bradstreet to Divest Previously Acquired Marketing Data Firm

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

To settle an FTC challenge to a 2009 acquisition, the Dun & Bradstreet Corporation has agreed to divestitures aimed at addressing the potential competitive harm caused by the transaction.

An FTC consent order resolves a May 2010 FTC complaint against Dun & Bradstreet, over its $29 million acquisition of Quality Educational Data (QED), a division of Scholastic, Inc.

The agency alleged that the transaction combined Dun & Bradstreet’s Market Data Retrieval and QED—the only two significant competitors in the K-12 data market, according to the agency.

As a result of the acquisition, Market Data Retrieval—which describes itself as “the market’s first choice for marketing information and services for the K-12, higher education, library, early childhood, and related education markets"—allegedly holds over 90 percent of the K-12 data market.

The $29 million acquisition was below the threshold that would have triggered pre-merger filing requirements, and therefore the companies were not required to notify the FTC and Department of Justice.

Divestiture, Customer Option

The FTC consent order requires Dun & Bradstreet to divest to MCH Inc.—an institutional and educational data company active in the K-12 data market—an updated K-12 database, the QED name, and certain associated intellectual property.

Dun & Bradstreet has also agreed to offer its customers the option to terminate their contracts with the firm without penalty so that they can consider doing business with MCH and to release certain Dun & Bradstreet employees from restrictions on their ability to work for MCH. In addition, Dun & Bradstreet is required to provide MCH with technical assistance for up to one year. Finally, the order calls for the appointment of a Commission-designated monitor to ensure compliance with its terms.

Expedited Order

To “enable MCH expeditiously to acquire the divested assets and begin to compete during the upcoming back-to-school selling season," the Commission took the unusual step of issuing its final order in advance of the comment period. Dun & Bradstreet was required to complete the divestiture of the QED K-12 data business assets not later than five days after the order became final.

Normally, the agency does not issue a final order until it considers all comments received during the comment period. The agency explained, however, that the settlement remained subject to public comment. The Commission could reopen and modify its Decision and Order or commence a new administrative proceeding if necessary in light of the public comments.

Dun & Bradstreet Response

Dun & Bradstreet said in a September 10 statement that although it did not believe that the acquisition violated the federal antitrust laws, “our agreement to sell a package of assets acquired in the 2009 acquisition of QED preserves important enhancements to MDR’s offerings, while addressing the concerns raised by the FTC.”

The administrative action is In the Matter of the Dun & Bradstreet Corporation, FTC Docket No. 9342. Further details will appear at CCH Trade Regulation Reporter ¶16,497.

Text of the agreement containing the consent order, the decision and order, and a news release appear here on the FTC website.

Biopharmaceutical Firm Drops Attempted Acquisition of Competitor

This posting was written by Jeffrey May, Editor of CCH Trade Regultion Reporter.

CSL Limited and Talecris Biotherapeutics Holdings Corporation announced on June 9 their decision to abandon a proposed combination in light of an FTC challenge to the transaction.

The FTC moved to block CSL’s proposed $3.1 billion acquisition of Talecris on the ground that the transaction would substantially reduce competition in the U.S. markets for four plasma-derivative protein therapies: Immune globulin (Ig), Albumin, Rho-D, and Alpha-1.

In addition to issuing an administrative complaint, the Commission sought a preliminary injunction in the federal district court in Washington, D.C., to stop the transaction pending completion of the administrative trial.

FTC Bureau of Competition Director Richard Feinstein called the decision to drop the deal “a tremendous victory for the patients who rely on these lifesustaining treatments.” He added that Commission staff “was fully prepared to demonstrate the anticompetitive harm that would have resulted from this acquisition.”

Dr. Brian McNamee, CEO and Managing Director of CSL, said that, while the company disagreed with the FTC case and matters included in their complaint, “CSL’s Board of Directors did not believe that entering into a protracted litigation process with the FTC, with its inherent risks, substantial costs, and lengthy distraction of CSL management and staff from planning and running our businesses, would be in the best interests of our takeholders.”

Under the merger agreement, CSL is required pay Talecris a $75 million break fee.

The FTC news release on the development appears here on the Commission’s website. CSL Limited’s announcement appears here on the company website.