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FTC files complaint against dental companies

February 13, 2018 Washington — The Federal Trade Commission on Feb. 12 filed a complaint against three dental supply companies, alleging the companies violated federal antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners.

The dental companies, Benco Dental, Henry Schein Inc. and Patterson Companies Inc., are alleged to have "unreasonably restrained price competition for dental products in the United States; distorted prices and undermined the ability of independent dentists to obtain lower prices and discounts for dental products; deprived independent dentists of the benefits of vigorous price and service competition among full-service, national dental distributors; unreasonably reduced output of dental products to dental buying groups; and eliminated or reduced the competitive bidding process for sales to these buying groups." In a news release, the FTC noted that the buying groups sought lower prices for dental supplies and equipment on behalf of solo and small group dental practices.

"The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors," said FTC, adding that "collectively, the big three are alleged to control more than 85 percent of all distributor sales of dental products and services nationwide, a total market estimated at approximately $10 billion."

The complaint also asserts that Benco violated Section 5 of the FTC Act on multiple occasions for "inviting a fourth competing distributor to join the conspiracy" when it asked Burkhart Dental Supply "to refuse to provide discounts to buying groups." Section 5 protects consumers from "unfair methods of competition," according to the FTC website.

Henry Schein and Patterson denied the charges in statements posted on their websites. Benco has yet to respond publicly to the complaint.

"Based on the FTC's press release, [Henry Schein] is being accused of participating in a conspiracy to refuse to provide discounts to, or compete for, the business of buying groups," read the Henry Schein press release. Schein claims that, contrary to the FTC's allegations, it has consistently done business with buying groups, and has never entered into an agreement with others to refuse to do business with buying groups. Schein "believes that the allegations as described in the press release are meritless and intends to defend itself vigorously."

In a similar release, Patterson said that it "believes that the allegations as described are meritless and intends to defend itself vigorously. The complaint seeks injunctive relief and does not seek monetary damages. The company does not anticipate that this matter will have a material adverse effect on our financial condition or results of operations."

For more information on the Federal Trade Commission, visit FTC.gov.