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NIELSEN AGREES TO CHANGES IN EUROPE: EC WARNING LEADS TO SHIFT IN HOW CLIENTS ARE TREATED

By Published on .

[brussels] The European Commission has pushed market research company A.C. Nielsen Co. into dropping a carrot-and-stick approach to winning European business through discounts and exclusive data-gathering deals.

Acting on a complaint from rival researcher Information Resources Inc., the commission sent Nielsen a written warning in May 1996 that its practices in Europe were anticompetitive.

CREATING LEVEL PLAYING FIELD

After reviewing its own business methods, Nielsen last week finally wrote back to the commission promising to change its practices.

"This undertaking by A.C. Nielsen creates a level playing field in the market for the provision of retail tracking services in Europe," said Karel Van Miert, the commissioner in charge of the competition directorate.

As a result of Nielsen's "undertaking," or agreement, with the European Commission, the U.S. Justice Department's antitrust division has called off its investigation into the company's European operations.

Nielsen's stated plan will remain in place for three years, during which time the commission will monitor the company's activities at regular intervals.

IRI's complaints against Nielsen focused on two specific aspects of the U.S.-based company's activities in Europe.

MULTICOUNTRY DISCOUNTS

First, Nielsen was giving its clients multicountry discounts of up to 30% on condition that multinational advertisers bought their information exclusively from Nielsen in every European market.

Second, Nielsen was insisting that the retailers, especially supermarket chains, not sell the information gathered by electronic tracking devices at checkout counters to other researchers.

"We stopped both these practices in May when the commission first contacted us," said Barry Holt, senior VP-global communications at Nielsen. "We sent them the written undertaking last week, and we are happy that the whole story is now behind us."

PLAYING BY RULES

"IRI as well as ourselves has to play by these rules now," he added. Mr. Holt claims IRI was using similar exclusivity deals in the U.K., but could not give any details.

"We are very pleased," said Sandra Ridley, IRI's director of service quality. "It means we can increase business in Europe with customers that until now were afraid to talk to us because of their ties to Nielsen."

IRI has operations in France, Greece, Italy, Turkey and the U.K. It also works in Germany, Holland and Sweden through a strategic alliance with German researcher GFK, and in the Middle East and eastern Europe through an alliance with Middle East Market Research Bureau.

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