FTC has Given Final Approval to a Consent Agreement with First Data Corporation, in Connection with that Firm's Merger with First Financial Management Corporation.

The Federal Trade Commission has given final approval to a consent agreement with First Data Corporation, in connection with that firm's merger with First Financial Management Corporation. The consent order settles charges that the $6.7 billion merger would violate federal antitrust law and lead to higher prices for money wire transfer services, because these are the only two companies that offer these services in the United States. The Commission's action makes the consent order provisions binding.

First Data is based in Hackensack, New Jersey, and First Financial is based in Atlanta, Georgia.

Under the final order, First Data must divest either its own MoneyGram business or First Financial's Western Union business to an entity that will operate the business in competition with the merged company, thus restoring two competitors to the market. The divestiture must occur within 12 months to a Commission- approved acquirer, and First Data must provide the acquirer with the personnel, assistance, and training it reasonably needs for up to six months. If First Data fails to sell either business by the deadline, the Commission may appoint a trustee to divest the Western Union business. Additionally, First Data must maintain the marketability and viability of the business to be divested and operate it separately from the competing business, pending sale.

The consent order also prohibits First Data, should it determine to divest the MoneyGram business, from entering into a contract with any selling agent that, at the time of the divestiture, is under contract to provide the MoneyGram service, until that contract expires. Also, the order expressly allows First Data to provide data processing services, subject to limitations, to the acquirer of the MoneyGram business. Should the acquirer choose to use First Data, First Data must shield employees involved in its consumer money wire transfer services business from any nonpublic information it gains from the acquirer in providing such services. (This provision would allow the acquirer to use First Data's data processing service without risking that its proprietary information will be revealed to a direct competitor.)

The consent agreement was announced for a public-comment period on Sept. 21, 1995. The Commission vote to issue it in final form occurred on Jan. 16 and was 5-0, with Commissioner Christine A. Varney issuing a concurring statement in which she said: "The First Financial/First Data merger represents another milestone in the fast-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."

NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $10,000.

A news release summarizing the complaint and consent agreement was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release, the complaint and final order, and Commissioner Varney's statement are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202-326- 2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov

(FTC File No. 951 0107)
(Docket No. C-3635)
(first-2)