2020-07588. [Ouml]ssur Hf.; Analysis of Agreement Containing Consent Order To Aid Public Comment  

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    AGENCY:

    Federal Trade Commission.

    ACTION:

    Proposed consent agreement; request for comment.

    SUMMARY:

    The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis of Agreement Containing Consent Order to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.

    DATES:

    Comments must be received on or before May 11, 2020.

    ADDRESSES:

    Interested parties may file comments online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section Start Printed Page 20278below. Please write: “Össur Hf.; File No. 191 0177” on your comment, and file your comment online at https://www.regulations.gov by following the instructions on the web-based form. If you prefer to file your comment on paper, please mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580; or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024.

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    FOR FURTHER INFORMATION CONTACT:

    Emily Bowne (202-326-2552), Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.

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    SUPPLEMENTARY INFORMATION:

    Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 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 thirty (30) days. The following Analysis of Agreement Containing Consent Order to Aid Public Comment describes the terms of the consent agreement and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC website (for April 7, 2020), at this web address: https://www.ftc.gov/​news-events/​commission-actions.

    You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before May 11, 2020. Write “Össur Hf.; File No. 191 0177” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the https://www.regulations.gov website.

    Due to the public health emergency in response to the COVID-19 outbreak and the agency's heightened security screening, postal mail addressed to the Commission will be subject to delay. We strongly encourage you to submit your comments online through the https://www.regulations.gov website.

    If you prefer to file your comment on paper, write “Össur Hf.; File No. 191 0177” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580; or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.

    Because your comment will be placed on the publicly accessible website at https://www.regulations.gov,, you are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information, such as your or anyone else's Social Security number; date of birth; driver's license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any “trade secret or any commercial or financial information which . . . is privileged or confidential”—as provided by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—including in particular competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

    Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted on the public FTC website—as legally required by FTC Rule 4.9(b)—we cannot redact or remove your comment from the FTC website, unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request.

    Visit the FTC website at http://www.ftc.gov to read this Notice and the news release describing this matter. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding, as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before May 11, 2020. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see https://www.ftc.gov/​site-information/​privacy-policy.

    Analysis of Agreement Containing Consent Order To Aid Public Comment

    Introduction

    The Federal Trade Commission (“Commission”) has accepted from Össur Hf., Össur Americas Holdings, Inc., (collectively “Össur”) and College Park Industries, Inc., (“College Park”), subject to final approval, an Agreement Containing Consent Order (“Consent Agreement”) designed to remedy the anticompetitive effects that would likely result from Össur's proposed acquisition of College Park. The proposed Decision and Order (“Order”) contained in the Consent Agreement requires College Park to divest its myoelectric elbow business to Hugh Steeper Ltd. (“Steeper”).

    The proposed Consent Agreement has been placed on the public record for thirty days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty days, the Commission will review the comments received and decide whether it should withdraw, modify, or make final the Consent Agreement.

    Pursuant to a Stock Purchase Agreement dated July 19, 2019, Össur agreed to acquire College Park (the “Acquisition”). The Commission's Complaint alleges that the proposed Acquisition, if consummated, 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, by substantially lessening future competition between College Park and Össur in the development, manufacturing, marketing, distribution, and sale of myoelectric elbows. The proposed Consent Agreement would remedy the alleged violations by preserving the competition that otherwise would be lost in this market as a result of the proposed Acquisition.

    The Parties

    Headquartered in Reykjavik, Iceland, Össur Hf. is engaged in the Start Printed Page 20279development, manufacture, sale, and distribution of upper and lower-limb prosthetic devices. Össur Hf. markets and sells its prosthetics throughout the United States through its subsidiary, Össur Americas Holdings, Inc., which is headquartered in Foothill Ranch, California. College Park, headquartered in Warren, Michigan, also is engaged in the development, manufacture, sale, and distribution of upper and lower-limb prosthetics.

    The Relevant Product Market and Market Structure

    The relevant product market in which to assess the competitive effects of the proposed acquisition is no broader than the development, manufacturing, marketing, distribution, and sale of myoelectric elbows. Myoelectric, or powered, elbows use electromyographic signals and battery-powered motors to control movement of the prosthetic. Myoelectric elbows fit directly on the residual limb and use electrical signals generated by muscles to move the motorized elbow componentry. Myoelectric elbows provide substantial functional advantages over mechanical elbows, such as being easier and more natural to control than mechanical elbows.

    The relevant geographic area in which to assess the competitive effects of the Acquisition is the United States. The United States has unique regulatory and reimbursement requirements that distinguish it from other countries where myoelectric elbows are sold, and manufacturers require U.S. sales and clinical personnel to support their U.S. clinic customers.

    The U.S. market for myoelectric elbows is highly concentrated. Respondent College Park is a leading supplier of myoelectric elbows and Respondent Össur is currently developing its own myoelectric elbow. The only other participants in the U.S. myoelectric elbow market are Otto Bock Healthcare North America and Fillauer LLC.

    Effects of the Acqusition

    Absent a divestiture, the Acquisition is likely to harm customers of myoelectric elbows in the United States. College Park is currently a leading manufacturer of myoelectric elbows in the United States. Össur is the largest prosthetic manufacturer in the United States that does not currently offer a myoelectric elbow, but it is developing a myoelectric elbow to enter the market. Absent the Acquisition, the highly concentrated myoelectric elbow market likely would benefit significantly from Össur's entry and Össur would compete directly for College Park's customers.

    Entry

    Entry into the myoelectric elbow market would not be timely, likely, or sufficient in magnitude, character, and scope to deter or counteract the anticompetitive effects of the proposed Acquisition. De novo entry is unlikely to occur in a timely manner because the time required for product development and market adoption is lengthy, and the only passive and body-powered elbow manufacturers already sell myoelectric elbows.

    The Consent Agreement

    The proposed Order would remedy the competitive concerns raised by the proposed transaction by requiring Össur to divest to Steeper the worldwide College Park myoelectric elbow business. The divestiture package consists of the following assets and rights: all assets and rights to research, develop, manufacture, market, and sell the College Park myoelectric elbow products, including all related intellectual property and other confidential business information, manufacturing technology, and existing inventory. Steeper will also be hiring several key College Park employees who are essential to the divested business. Additionally, the Order requires that, at the request of Steeper, Össur must provide transitional assistance for up to fifteen months following the divestiture date (with an option to extend further with Commission approval). These services include logistical, administrative, and sales and marketing support. The Order also includes other standard terms designed to ensure the viability of the divested business. The provisions of the proposed Consent Agreement position Steeper to become an effective competitor in the market for myoelectric elbows in the United States.

    Under the Order, College Park is required to divest its myoelectric elbow business no later than ten days from the close of its acquisition by Össur. If the Commission determines that Steeper is not an acceptable acquirer, or that the manner of the divestiture is not acceptable, the Order requires College Park to either unwind the sale of rights and assets to Steeper and then divest the assets to a Commission-approved acquirer within 180 days of the date the Order becomes final, or modify the divestiture to Steeper in the manner the Commission determines is necessary to satisfy the requirements of the Order.

    The Order also requires a monitor to oversee Össur's compliance with the obligations set forth in the Order. If Össur does not fully comply with the divestiture and other requirements of the Order, the Commission may appoint a Divestiture Trustee to divest the myoelectric elbow assets and perform Össur's other obligations consistent with the Order. The Order also requires that Össur shall not acquire, without providing advance written notification to the Commission, any myoelectric prosthetic elbow manufacturer or product for a period of five years from the date the Order is issued.

    The purpose of this analysis is to facilitate public comment on the Consent Agreement to aid the Commission in determining whether it should make the Consent Agreement final. This analysis is not an official interpretation of the proposed Consent Agreement and does not modify its terms in any way.

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    By direction of the Commission.

    April J. Tabor,

    Acting Secretary.

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    [FR Doc. 2020-07588 Filed 4-9-20; 8:45 am]

    BILLING CODE 6750-01-P

Document Information

Published:
04/10/2020
Department:
Federal Trade Commission
Entry Type:
Notice
Action:
Proposed consent agreement; request for comment.
Document Number:
2020-07588
Dates:
Comments must be received on or before May 11, 2020.
Pages:
20277-20279 (3 pages)
Docket Numbers:
File No. 191 0177
PDF File:
2020-07588.Pdf