Idexx Agrees To Drop Distribution Deals
Maine-based veterinary diagnostic testing supplier Idexx Laboratories Inc., which has operations in North Grafton, has resolved a federal complaint by agreeing to drop exclusive business arrangements with a top distributor, the Federal Trade Commission (FTC) said.
The FTC had charged that Idexx had been using its exclusive arrangements with three national distributors to stifle competition. The agency said Idexx had "used its dominant market power," threatening to drop the distributors if they carried other companies' products that compete with Idexx products.
"The company's exclusionary conduct has blocked its rivals from this sales channel, often marginalizing them or forcing them out of the market," the FTC said in a statement.
Under the agency's definition, Idexx has monopoly power in the "point-of-care diagnostic products market because its market share was at least 70 percent between 2006 and 2011, with no other firm having more than 20 percent during that time.
More than 85 percent of all products and supplies that small-animal vets purchase through distribution are sourced through one of the company's five top distributors, according to the FTC.
"We are very pleased that the commission has acted quickly in preliminarily approving the consent agreement that we reached with the Bureau of Competition staff just a couple of weeks ago," said Jonathan Ayers, chairman and CEO of Idexx. "While we admit no wrongdoing and continue to believe that our distribution practices do not violate the antitrust laws, as these same practices have been upheld in previous litigation victories, this is another important step toward final resolution of the multi-year FTC investigation, which we now expect to occur early in 2013."
Under the proposed FTC order, Idexx would be barred from maintaining concurrent exclusive distribution agreements with all three top tier distributors for the next decade, and from retaliating against non-exclusive distributors, withholding products, or using other means to limit distributors' sales of other manufacturers' products.
The order will be subject to public comment until Jan. 24, after which the trade commission will decide on whether or not to make it final.
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