Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Polymer supplier settles FTC’s monopoly maintenance claims, (Apr 27, 2016)

By Greg Hammond, J.D.

Victrex plc, Invibio Ltd., and Invibio, Inc. (collectively, “Invibio”)—companies that supply some of the world’s largest medical device makers with high-performance polymer used to make spinal and other medical implants—have settled FTC claims that the companies unlawfully used exclusive contracts to maintain their monopoly (In the Matter of Victrex plc, File No. 141 0042).

The FTC’s administrative complaint alleges that Invibio is the dominant supplier of implant-grade polyetheretherketone (PEEK), a specialty polymer used by medical device makers to construct spinal, orthopedic, and other human implants. Solvay Specialty Polymers LLC and Evonik Corp. are purportedly Invibio’s only competitors in the sale of implant-grade PEEK. The Commission claims that Invibio insisted on exclusive terms in its long-term supply contracts with medical device makers, allegedly using strategies to coerce or induce device makers to agree to the exclusive terms, such as threatening to discontinue PEEK supply or to withhold access to regulatory support.

As a result of the exclusive terms, the FTC alleges that a substantial majority of sales have been foreclosed from Solvay and Evonik, and that Invibio’s insistence on exclusive terms has been a deliberate and successful strategy to hinder its competitors and to maintain its monopoly power. PEEK purchasers also purportedly have been deprived of a meaningful choice among suppliers and have been denied the full benefits of competition, the complaint asserts.

Invibio has now settled the allegations that it violated the FTC Act. Under the Commission’s Decision and Order, Invibio is prohibited from entering into and enforcing any agreement that has the effect of achieving exclusivity with a customer, as well as from discriminating against or penalizing any customer that engages in, or intends to engage in, research and development of any customer product using a competing PEEK.

“This case affirms that the first company to enter a market cannot rely on anticompetitive contract terms to lock up customers and box out rivals,” stated Debbie Feinstein, Director of the FTC’s Bureau of Competition. “This settlement is designed to provide buyers a meaningful choice among suppliers, to open the door to price competition, and to enhance innovation.”

Attorneys: Barbara Sicalides (Pepper Hamilton LLP) for Victrex plc, Invibio Ltd., and Invibio, Inc. Mika Ikeda, FTC Bureau of Competition.

Companies: Victrex plc; Invibio Ltd.; and Invibio, Inc.

News: Antitrust FederalTradeCommissionNews