[Federal Register Volume 61, Number 196 (Tuesday, October 8, 1996)]
[Notices]
[Page 52799]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25739]
[[Page 52799]]
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FEDERAL TRADE COMMISSION
[File No. 961-0060]
Wesley-Jessen Corporation; 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 or deceptive acts or practices and unfair methods of
competition, this consent agreement, accepted subject to final
Commission approval, would, among other things, require the Des
Plaines, Illinois-based maker of opaque contact lenses to divest the
opaque lens business of its main rival, Pilkington Barnes Hind
International, Inc. The Commission had alleged that the merger of
Wesley-Jessen, which manufactures the Durasoft line of opaque lenses,
and Pilkington Barnes Hind, which makes the Natural Touch line, would
give the merged firm more than 90 percent of the opaque contact lens
market, potentially resulting in higher consumer prices and reduced
innovation or quality for the lenses.
DATES: Comments must be received on or before December 31, 1996.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room H-159, Sixth Street and Pennsylvania Avenue, NW., Washington, DC
20580.
FOR FURTHER INFORMATION CONTACT:
William J. Baer, Federal Trade Commission, H-374, 6th and Pennsylvania
Ave, NW., Washington, DC 20580. (202) 326-2932.
George C. Cary, Federal Trade Commission, H-374, 6th and
Pennsylvania Ave, NW., Washington, DC 20580. (202) 326-3741.
Ann Malester, Federal Trade Commission, S-2308, 6th and
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 above-captioned 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. The following Analysis to Aid
Public Comment describes the terms of the consent agreement, and the
allegations in the accompanying complaint. An electronic copy of the
full text of the consent agreement package can be obtained from the FTC
Home page, on the World Wide Web, at ``http://www.ftc.gov/os/actions/
htm.'' A paper copy can be obtained from the FTC Public Reference Room,
Room H-130, Sixth Street and Pennsylvania Avenue, NW., Washington, DC
20580. 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)).
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
Wesley-Jessen Corporation (``Wesley-Jessen'') which requires Wesley-
Jessen to divest the opaque contact lens business of Pilkington Barnes
Hind International, Inc. (``PBH'') to a Commission-approved purchaser
by January 24, 1997, four (4) months from the date the agreement was
signed. PBH's Opaque Lens Business includes an exclusive license under
PBH's patents and a non-exclusive license under other patents owned by
Wesley-Jessen relating to the manufacture and sale of opaque lenses in
the United States. Further, Wesley-Jessen has agreed to enter into a
contract manufacturing supply agreement which requires Wesley-Jessen to
supply the acquirer with PBH's opaque lenses while the acquirer obtains
its own FDA approvals.
Opaque contact lenses are lenses that completely change the color
of the wearer's eyes, e.g., wearing opaque lenses, a brown-eyed person
can appear blue-eyed. Wesley-Jessen and PBH dominate the opaque lens
market in the United States, accounting for over 90% of all opaque lens
sales. Wesley-Jessen, in acquiring PBH, is buying its main rival in the
opaque contact lens market. The possibility of new entry in response to
a post-merger price increase is very remote because of barriers
presented by broad industry patents governing the design and
manufacture of opaque lenses. The proposed complaint alleges that the
acquisition, if consummated, would result in higher prices, lower
quality and less innovation in the opaque contact lens market.
On March 27, 1996, Wesley-Jessen and PBH signed a Letter of Intent
whereby Wesley-Jessen would acquire 100 percent of the voting
securities of PBH, voting securities of certain foreign issuers
controlled by PBH and certain assets located outside the United States
for approximately $80 million. The proposed complaint alleges that the
proposed acquisition would violate 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 the sale of opaque contact lenses in the
United States.
The proposed Consent Order preserves competition in the opaque
contact lens market while allowing Wesley-Jessen to increase production
and sales volumes in its broader conventional contact lens business.
The proposed Order would remedy the alleged violation in the opaque
contact lens market by ensuring that an acquirer of the PBH Opaque Lens
Business would be in the same competitive position that PBH is in today
as a manufacturer and seller of opaque contact lens in the United
States. The Order requires that the acquirer secure the requisite FDA
approvals to begin its own production of opaque contact lenses within
eighteen months from Commission approval of the acquirer.
Additionally, the proposed Consent Order provides that within three
(3) months of the date the Order is signed, the Commission may appoint
a trustee to monitor Wesley-Jessen's and the acquirer's performance of
their respective responsibilities. In the event that Wesley-Jessen has
not divested the PBH Opaque Lens Business within four (4) months to an
acquirer approved by the Commission, the Commission may direct the
trustee described earlier in this paragraph to divest PBH's Opaque Lens
Business.
Also, the Consent Order prohibits Wesley-Jessen, for a period of
ten (10) years, from acquiring any interest in any entity engaged in
the development, manufacturer and sale of opaque contact lenses in the
United States without prior notice to the Commission.
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 (60) 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.
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.
[FR Doc. 96-25739 Filed 10-7-96; 8:45 am]
BILLING CODE 6750-01-M
