Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Dental supplies distributors allegedly conspired to monopolize market through group boycotts, (Jan 29, 2016)
Law Firms Mentioned:Burns Charest LLP | Criden & Love, P.A. | Nussbaum Law Group, P.C. | Nussbaum Law Group, P.C.
Organizations Mentioned:Benco Dental Supply Company | Burns Charest, LLP | Criden & Love, PA | Henry Schein | Henry Schein, Inc. | Nussbaum Law Group, PC | Patterson Companies, Inc. | Patterson Dental Co.
By Linda O’Brien, J.D., LL.M.
Three leading distributors of dental supplies conspired to monopolize the dental supplies market by engaging in or threatening group boycotts in order to block or impair the ability of rivals to compete in that market, according to a complaint filed in the federal district court in Brooklyn, New York (Corwin v. Benco Dental Supply Co., January 27, 2016).
Patterson Companies, Henry Schein, Inc., and Benco Dental Supply Company are the three principal distributors of dental supplies and equipment in the United States. Robert Corwin operates a dental practice in New York City.
The complaint states that dental supplies distributors carry a full range of supplies, giving dental practitioners the ability to “one stop shop,” a convenience for which the distributors have traditionally charged a premium. These higher prices have left economic opportunities for lower cost distributors to enter the market. Many state dental associations have been actively interested in sponsoring or partnering with new distributors as a benefit to their members.
After a new distributor created an online dental supplies distribution platform in 2013 that offered dental supplies at lower prices, the defendant distributors reach an agreement to thwart the success of new competitors through unlawful threats and boycotts of competitors and entities that dealt with the new competitors. Specifically, Corwin claims that the defendants threatened manufacturers and other distributors to cease supplying new lower-priced competitors with dental supplies and pressured state dental associations to cease doing business with these competitors.
Because the defendants hold a dominant share of the dental supplies market, many manufacturers that rely on the defendants for a substantial portion of the review were dissuaded from doing business with the new competitors. The defendants also pressured state dental associations to refrain from doing business with their competitors and boycotted associations that endorsed or partnered with those competitors, the complaint alleges.
According to Corwin’s complaint, the market for the distribution of dental supplies is highly concentrated. Patterson Companies, Henry Schein, and Benco Dental Supply together allegedly account for 80 to 90 percent of the all sales in the market. The anticompetitive conduct maintained and increased the defendants’ collective market power and enabled them to maintain supra-competitive prices, asserts Corwin.
The plaintiff claims that the alleged agreements to boycott constitute an unlawful restraint of trade in violation of Section 1 of the Sherman Act. The action seeks declaratory relief, treble damages, interest, costs of suit, attorney fees, and any other just and proper relief.
In a related action, a complaint filed by a Florida dentist in the federal district court in Brooklyn, New York alleges that the leading distributors of dental supplies engaged in a conspiracy to boycott state dental associations and dental supplies manufacturers that do business with new lost cost distributors in order to eliminate competition (Schwartz v. Benco Dental Supply Co., January 27, 2016).
The cases are Nos. 1:16-cv-00442-BMC and 1:16-cv-00443-JBW-PK.
Attorneys: Linda P. Nussbaum (Nussbaum Law Group, P.C.) for Robert Corwin. Linda P. Nussbaum (Nussbaum Law Group, P.C.), Michael E. Criden and Kevin B. Love (Criden & Love, P.A.), and Warren T. Burns (Burns Charest LLP) for Keith Schwartz.
Companies: Patterson Companies, Inc.; Henry Schein, Inc.; Benco Dental Supply Company
News: Antitrust NewYorkNews