Patterson, Benco decline to appeal decision regarding FTC complaint
November 19, 2019
— Patterson Companies announced
Nov. 8 that it reached a settlement agreement with the Federal Trade Commission regarding an administrative complaint filed by the FTC concerning alleged misconduct.
The FTC issued an administrative complaint
in 2018 alleging that Benco Dental Supply Co., Henry Schein and Patterson, the nation's three largest dental supply companies, violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners.
The commission did not reach a determination regarding Patterson’s alleged conduct, but, as a result of the settlement, Patterson and the FTC decided not to appeal the recommendation of the administrative law judge and Patterson agreed to abide by the terms of the judge’s remedial order. The order did not impose any monetary fine on the company or require an outside monitor.
While Patterson disagreed with the judge’s findings and believed it had meritorious grounds to appeal the initial decision, the company determined that, for business reasons, a settlement was in its best interest, according to a Patterson news release
"Following the [judge’s] initial recommendation, the FTC approached Patterson with an offer to settle this matter,” the release said. “We continue to categorically deny any wrongdoing and believe that the facts and mainstream legal precedent demonstrate the company’s independent and lawful decision-making in a highly competitive industry. However, after an evaluation of all options — including an appeal to the FTC’s full commission and, potentially, an appeal to a federal circuit court after that — Patterson determined that a settlement is in the company’s best interest, and allows us to avoid the costs, distraction and uncertainty related to this matter.”
Chief Administrative Law Judge D. Michael Chappell held in his Oct. 15 decision
that two of three respondents — Benco and Patterson — named in a Federal Trade Commission complaint violated U.S. antitrust laws.
Benco also declined to appeal that decision to the federal district court.
“While we respectfully disagree with the ruling, Benco Dental has made a business decision not to appeal,” according to a statement from the company. “We're pleased that, contrary to the FTC's original claim, it was concluded that there was no industrywide conspiracy regarding dental buying groups. Considering that no fine was imposed, or onerous restrictions put in place, we feel there is little to gain by committing any further resources to the matter.”
Judge Chappell dismissed claims that Henry Schein conspired with competitors.
Buying groups seek lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices.
The case is unrelated to and separate from a federal court-approved $80 million settlement agreement in a class action lawsuit against Henry Schein, Patterson and Benco, who were accused of violating antitrust laws by fixing prices on dental equipment and supplies. For more information on the case specifics, visit ADA.org
and search for ADA News stories containing the words “$80 million settlement.”