COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S.C. 1985 c. C-34, as amended:: AND IN THE MATTER OF the combination oflElectronic Television Audience Measurement Services of BBM Canada and Nielsen Media Research Limited;
AND IN THE MATTER OF the filing and registration of a consent agreement pursuant to section 105 of the Competition Act; BETWEEN:
COMPETITION TRIBUNAL THE COMMISSIONER OF COMPETITION Applicant l r .. :IUN 23 2006 TRIBUNAL DE LA CONCURRENCE ,llUJN F (_\-1.006-00~: - and-L ~&1~ 18 2006 Ct.· g FOR tEGISTRAR I t'~ g BBM CANADA and POl!i RECIS'lllAIRE 3Ly NIELSEN MEDIA RESEARCH LIMITED REOtSTRAR • REGISTRAIR£ T Respondents OTTAWA, ON I~ aoo I CONSENT AGREEMENT WHEREAS BBM Canada and Nielsen Media R€:search Limited have agreed to combine their respective Canadian Electronic Television Audience Measurement services (except BBM's service in Quebec) in a jointly owned company ("Newco") (the "Transaction");
AND WHEREAS the Commissioner of Competition (the "Commissioner'") has expressed concerns that, without the specific commitmc::nts contained herein, the: Transaction, if substantially completed, could lessen competi1ion substantially in respect of Electronic Television Audience Measurement in Canada;
AND WHEREAS BBM Canada and Nielsen Media Research Limited do not admit to any substantial lessening or prevention of competition in any relevant market, but, for the purpose of this Consent Agreement and any proceedings related to the subject matter thereof, ex<.:ept as specifically noted herein, including any proceeding pursuant to section 106 of the Competition Act R.S.C. 1985 c.c-34 as amended (the "Act"), do not contest the Commissioner's initial conclusions;
AND WHEREAS the Commissioner is satisfied that, subject to the terms. of this Consent Agreement, the actions required to be taken pursuant to this Consent Agreement, will address the Commissioner's concerns that the Transaction is likely to prevent or lessen competition substantially in any relevant geographic or product market;
AND WHEREAS, subject to the terms of this Consent Agreement, with the execution of this Consent Agreement and subject to compliance with the terms therein, the Commissioner "'rill not
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2 oppose the Transaction, in whole or in part, pursuant to sections 92, 100 or 104 of the Act, saving throughout the parties' ability to, if otherwise appropriate, apply under s. l 06 of the Act.
NOW THEREFORE the Respondents and the Commissioner agree as follows,: Defmitions 1. For the purposes of this Consent Agreement, the following capitalized terms have the following meanings:
(a) "DBM" means BBM Canada, a not for profit corporation established pursuant to the laws of Canada.
(b) "Business Day" means any day other than a Saturday, a Sunday, any statutory holiday observed in Toronto, Ontario or the following statutory holidays observed in New York State: President's Day, Memorial Day, Independence~: Day, Columbus Day and Thanksgiving.
( c) "Commissioner" means the Commissioner of Competition appointed pursuant to section 7 of the Act;
( d) "Consent Agreement" means this Consent Agreement entered into by the Respondents and the Commissioner together with all Schedules attached hereto;
(e) "Electronic TAM" means television audience measurement undertaken by electronic means (typically some form of meters, for example, lVCark II and PPM), rather than by diary or other manual means.
(f) "Mark II" means the Mark II met€~r electronic TAM system, which is currently used by NMR Canada to measure television audiences in Canada.
(g) "New Meter Technology" means Electronic TAM technology to be used by Newco in Canada, other than Mark II or PPM technology in Quebec.
(h) "Newco" means the corporation to be established pursuant to TI:te Transaction, to be owned by NMR Canada (50% of shares, all non-voting) and BBM (50% of shares, all voting).
(i) "NMR Canada" means Nielsen Media Research Limited, a corporation incorporated under the laws of Nova. Scotia.
(j) "PPM" means the portable personal meter Electronic TAM system, which is currently used by BBM to measure television audiences in the Province of Quebec.
(k) "Person" means any individual, partnership, firm, corporation, association, trust, unincorporated organization, government, Crown corporation or other entity;
3 (1) "Respondents" means BBM Canada and Nielsen Research Media Limited;. (m) "TAM" means television audience measurement. (n) "Transaction" means the series of agreements between, amongst others, BBM and NMR Canada, whereby BBM and NMR Canada agree to establish Newco, and to transfer to Newco their respective electronic TAM businesses in Canada, with the exception, initially, ofBBM's PPM service in Quebec.
(o) "Tribunal" means the Competition Tribunal established by the Competition Tribunal Act, R.S.C. 1985 c. 19 (2nd Supp.) as amended;
Application 2. The Respondents, the sole shareholders ofNewco, a company to be incorporated by them will, as part of the Transaction, take all actions within their respectiv1;: powers to cause Newco to adopt, agree to adhere to and be bound by the terms hereo£
3. The provisions of this Consent Agre:ement shall apply to: (a) each of the Respondents, and each officer, director, employee,, or other Person acting for or on behalf of the Respondents with respect to any of the matters referred to in this Consent Agreement, and any successors and assigns of either of them; and all other Persons acting in concert or participating with either of them or any successor(s) or assign(s) in respect of the matters referred to in this Consent Agreement:;
(b) following the completion of the Transaction, Newco, including each Affiliate or any other Person controlled by Newco and each officer, director, employee, or other Person acting for or on behalf of Newco with respect to any of the matters referred to in this Consent Agreement, and any successors and assigns ofNewco; and all other Persons acting in concert or participating with Newco or any successor(s) or as:sign(s) in respect of the matters referred to in this Consent Agreement; and
(c) the Commissioner. Technology Audit 4. BBM and Nielsen Canada agree to take all actions within their respective powers to cause Newco, and agree on behalf of Newco, a company to be incorporated, all of 1 whose issued and outstanding shares they will hold, that as and when Newco implemc;:nts collection of Electronic TAM data from a market in Canada by use of New Meter Technology, Newco shall commission an audit of the choice of such technology and the methodological practices of Newco in operating such system, by an independ1ent third party with appropriate expertise in assessing such systems who is satisfactory to the Commissioner ("Third Party"). Such audit
4 shall be designed to determine whether the technology functions appropriartely; whether the processes employed for collecting TAM data with such technology are appropriate; whether the technology and the processes together create audience estimates with the level of statistical reliability that is usual for the sample size deployed; and whether Newco follows the designed processes. If some aspects of such system have be:en appropriately audited els1;:where previously (including by or on behalf of the Media Rating Council in the United States) such previous work may be relied upon, as appropriate, as an aspect of the audit. Nothing in this Consent Agreement will require NMR Canada or its affiliates to releas(: any confidential audit information which it is otherwise obligated not to release, and if any audit information is provided to the Third Party, the Third Party may be required by NMR to enter into a reasonable confidentiality agreement, a copy of which shall be provided to the Commissioner. The results of tltis audit shall be forwarded to BBM, NMR Canada and the Commissioner and available to BBM members upon request. BBM' s current process with respect to choosing new technology is outlined in Schedule "A" to the Consent Agreement, but may be modified by BBM from time to time over the years, with notice to the Commissioner.
Major Adjustments to Electronic TAM Protocol Methodology 5. BBM and Nielsen Canada agree to take all actions within their respective powers to cause Newco, and agree on behalf of Newco, that as and when Newco makes major adjustments to its Electronic TAM protocol methodology after implementing New Meter Technology, Newco shall commission an audit of such revisions to its mc::thodology by an independent third party with appropriate expertise: who is satisfactory to the (::ommissioner, in order to determine whether such revised methodology, continues to create audience estimates with the level of statistical reliability that is usual for the sample size deployed, and Vlhether Newco follows such revised methodology. The results of this audit shall be forwarded to BBM, NMR Canada and the Commissioner and available to BBM members upon request.
Metering New Markets 6. BBM agrees that as and when ilt reviews whether Newco should provide Electronic TAM data for a geographic market in Canada which is not now measured electronically, it will fairly and accurately follow its then established proc:ess for deciding whether to proceed with such electronic TAM in 1he market. Its current process is outlined in Schedule "B" to the Consent Agreement, but may be modified by BBM from time to time over the years, upon notice to the Commissioner. BBM further agrees that it will employ an independent third party, such as its auditor or similar organization who is satisfactory to the Commissioner, to determine whether BBM has accurately followed its processes for determining whether to proceed with such electronic TAM. The results of such audit shall be - forwarded to BBM, NMR Canada and to the Commissioner and available to BBM members upon request.
Members Treated Alike 7. BBM agrees that it will treat all persons eligible for membership in BBM alike, in that the same service(s) shall be available to such persons at a rate and on terms comparable to the rate and terms applicable to other similarly situated BBM members, whether or not they were BBM members prior to the Transaction.
5 Term of Consent Agreement 8. The Consent Agreement shall remain in force until the earlier of: (a) fifteen years from the date on which it is filed with the Competition Tribunal; and (b) tb.e date on which another person establishes an Electronic TAM operation in Canada, upon which tel1evision advertising is bought and sold ,unless the parties agree to rescind or vary it.
General 9. Whenever a provision of this Consent Agreement requires an approval, consent, communication or action of the Commissioner, BBM or NMR Canada, such approval, consent, communication or action shall be, unless otherwise expressly stated herein, not unreasonably withheld or delayed, and words such as "consent" or "approval" or any action of a party indicated by the words "may" or "shall" shall be read together with the words ''acting reasonably" immediately thereafter.
10. The Respondents and the Commissioner may agree to amend this Consent Agreement in any manner pursuant to subsection l 06( 1) of the Act or otherwise pursuant to this Consent Agreement.
11. The Commissioner and the Respondents may agree to extend or abridge any of the time periods for the doing of any thing specified in this Consent Agreement.
12. If the Commissioner's or a Respondent's approval, consent, communication or action is sought pursuant to this Consent Agreement, and such approval, consent, communication or action, is not granted promptly, the party seeking the approval, consent, communication or action, may apply to the Tribunal to determine if the other party is in breach of paragraph 9 hereof. Any alleged breach or failure to perform in accordance with this Consent Agr(~ement may be the subject of an application to the Tribunal by the parties. Such application, shall, unless it is shown that respondent to such application has acted mala fide, contumaciously or in a manner contemptuous of this order, be:
(a) limited to seeking an order directing compliance with this Agreement; (b) not be contested by the Respondent 1thereto as to the jurisdiction of the Tribunal to deal with such application; and
( c) not seek an order for costs. 13. Notices, requests and other communications required or permitted pursuant to this Consent Agreement shall be in writing and shall be delivered by registered mail, courier or facsimile transmission to the persons set out in Schedule "C" to this Consent Agreement and shall be deemed to be received upon delivery or, in the case of facsimile transmission, on the next Business Day following transmission. A Respondent or the Commissioner may by written notice to the others change its address for notice purposes under this Consent Agreement but shall always provide a facsimile number.
6 14. This Consent Agreement constitutes the entire agreem€mt betwe(..'11 the Commissioner and the Respondents with respect to the subject matter hereof and supersc.-des all prior agreements, understandings, negotiations and discussions, whether written or oral.
15. In the event that the Transaction is not proceeded with for any reason, this Consent Agreement shall be null and void ab initio.
16. This Consent Agreement may be c~xecuted in counterpart and by facsimile and each such counterpart shall constitute an original and all of which taken together shall constitute one and the same instrument, dated as of the date set forth below.
Senior Deput}I Commissioner of Competifigti ,J_ By: (s) Gaston Jorn~~-- -~--· DATED this d3 day of June, 2006. BBMCanad~ By: ( s) Jim MacLeod DATED this 2 / day of June, 2006. Jim Macleod
President and Chief Executive Officer
Nielsen Media Research J..i.'1n~d By: (s) Mike Leahy DATED this Y._ day of June, 2006. Mike Leahy
President
'
SCHEDULE "A" Choosing new technology RFP Evaluation Process • Industry needs; • cost/benefit • expected life; and •market acceptance /support. recommendation Currently 18 Members Composition (to be • 6 advertisers/buyers determined) likely (min. 2 advertisers & 2 •advertisers/buyers; agencies); •broadcasters; and • 6 radio broadcasters; and •technical analyst. • 6 TV broadcasters.
SCHEDULE "B" EXAMPLE: Metering new market double majority meetings (months) majority of buyers; and majority decision majority of committee committee
• 50% local Currently 19 Members advertisers/buyers; and 7 advertisers/buyers; • 50% local broadcasters. IO broadcasters; 1 non-commercial; and 1 associate member.
* Board options: • first time - ratify or send back tv 1¥ Exec c~cc; and • second time - ratify or reject:
majority decision Television BBM Executive Board of Committee Directors* ratify or send back to TV Research C'ee
Currently 22 Members Currently 18 Members 9 advertisers/buyers; 6 advertisers/buyers 11 broadcasters; and (min. 2 advertisers & 2 associate members. 2 agencies); 6 radio broadcasters; and 6 TV broadcasters.
SCHEDULE "C" Notices (A) To the Commissioner: Senior Deputy Commissioner of Competition (Mergers Branch) Competition Bureau, Industry Canada Place du Portage, Phase I, 50 Victoria Stret::t Gatineau, Quebec KIA OC9
Facsimile: (819) 994-0998 With a copy to: Director, Competition Law Division Department of Justice Canada Competition Bureau, Industry Canada Place du Portage, Phase I, 50 Victoria Street Gatineau, Quebec KIA OC9
Facsimile: (819) 953-9267 (B) To BBM Canada : BBMCanada Suite 305 - 1500 Don Mills Road Don Mills, Ontario M3B3L7
Attention: Jim MacLeod, President and Chief Executive Officer Facsimile: ( 416) 445-8644 With a copy to: Lang Michener LLP 181 Bay Street, Suite 2500 Toronto, ON M5J 2T7
Attention: Jam es Musgrove Facsimile: (416) 365-1719
(c) To Nielsen Media Research Limited: 160 McNabb Street Markham, Ontario L3R4B8
Attention: President Telecopier No: 905-475-7296 With a copy to Fraser Milner Casgrain LLP Barristers and Solicitors 1 First Canadian Place 100 King Street West Toronto ON M5X 1B2
Attention: Randal Hughes Telecopier No: (416) 863-4592
CT- 1.o~ b- 00 6 SCHEDUI,E "D" COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S.C. 1985 c. C-34, as .~unended; AND IN THE MATTER OF the combination of the Electronic Television Audienc::e Measurement Services of BBM Canada and Nielsen Media Research Limited;
AND IN THE MATTER OF the filing and regjstration of a consent agreement pursuant to section 105 of the Competition Act;
BETWEEN: THE COMMISSIONER OF COMPETITION Applicant - and-
BBM CANADA and NIELSEN MEDIA RESEARCH LIMITED Respondents
CONSENT
THE PARTIES hereby irrevocably consent to the registration of a Consent Agrnement pursuant to section 105 of the Competition Act, R.:S.C. 1985, c. C-34, as amended, in the form to which this Schedule "C" is attached.
Senior Jlepo:tyCommissionef of Obmpetition By: ( s) Gaston Jam§ Dated at Q,tineau, Quebec Gaston Jorre thi~~y of Junie, 2006. Senior Deputy Commissioner of Competition
Competition Bureau, Industry Canada Place du Portage, Phase I, 50 Victoria Street Gatineau, Quebec KIA OC9
Telephone: (819) 997-5300 Facsimile: (819) 953-5013
DBM Canada By: (s) Jim Macleod Jitr MlfcLeod~ President and 'Chief Executive Officer
Suite 305 - 1500 Don Mills Road Don Mills, Ontario M3B 3L7
Telephone: (416) 847-2001 Facsimile: ( 416) 445-8644
Nielsen Media Research Limited: 160 McNabb Street Markham, Ontario L3R4B8
By: _(s2._Mike Leahy Mike Leahy President
Telephone No.: 905-475-9595 Telecopier No.: 905-475-7296
CT-2.¢0~·· ()0 £ THE COMMISSIONER OF COMPETITION Applicant - and--DBM CANADA and NIELSEN MEDIA RESEARCH LIMITED
Respondents
CONSENT AGREEMENT