Notice2022-10935
Medtronic/Intersect ENT; Analysis of Agreement Containing Consent Orders To Aid Public Comment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 20, 2022
Issuing agencies
Federal Trade Commission
Abstract
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis of Proposed Consent Orders to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders--embodied in the consent agreement--that would settle these allegations.
Full Text
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<title>Federal Register, Volume 87 Issue 98 (Friday, May 20, 2022)</title>
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[Federal Register Volume 87, Number 98 (Friday, May 20, 2022)]
[Notices]
[Pages 30953-30955]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-10935]
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FEDERAL TRADE COMMISSION
[File No. 211 0184; Docket No. C-4763]
Medtronic/Intersect ENT; Analysis of Agreement Containing Consent
Orders To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis of Proposed Consent Orders to Aid Public Comment
describes both the allegations in the complaint and the terms of the
consent orders--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before June 21, 2022.
ADDRESSES: Interested parties may file comments online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write: ``Medtronic/
Intersect ENT; Docket No. C-4763'' on your comment and file your
comment online at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by following the
instructions on the web-based form. If you prefer to file your comment
on paper, please mail your comment to the following address: Federal
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW,
Suite CC-5610 (Annex D), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Charles Dickinson (202-326-2617),
Bureau of Competition, Federal Trade Commission, 400 7th Street SW,
Washington, DC 20024.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis of Agreement Containing Consent Orders to Aid Public
Comment describes the terms of the consent agreement and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC website at
this web address: <a href="https://www.ftc.gov/news-events/commission-actions">https://www.ftc.gov/news-events/commission-actions</a>.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before June 21, 2022.
Write ``Medtronic/Intersect ENT; Docket No. C-4763'' on your comment.
Your comment--including your name and your state--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website.
Due to protective actions in response to the COVID-19 pandemic and
the
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agency's heightened security screening, postal mail addressed to the
Commission will be delayed. We strongly encourage you to submit your
comments online through the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website.
If you prefer to file your comment on paper, write ``Medtronic/
Intersect ENT; Docket No. C-4763'' on your comment and on the envelope,
and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite
CC-5610 (Annex D), Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including competitively sensitive information such
as costs, sales statistics, inventories, formulas, patterns, devices,
manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on <a href="https://www.regulations.gov">https://www.regulations.gov</a>--as legally required by FTC
Rule 4.9(b)--we cannot redact or remove your comment from that website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at <a href="https://www.ftc.gov">https://www.ftc.gov</a> to read this Notice
and the news release describing this matter. The FTC Act and other laws
the Commission administers permit the collection of public comments to
consider and use in this proceeding, as appropriate. The Commission
will consider all timely and responsive public comments it receives on
or before June 21, 2022. For information on the Commission's privacy
policy, including routine uses permitted by the Privacy Act, see
<a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Analysis of Agreement Containing Consent Orders To Aid Public Comment
I. Introduction
The Federal Trade Commission (``Commission'') has accepted for
public comment, subject to final approval, an Agreement Containing
Consent Orders (``Consent Agreement'') from Medtronic plc, Medtronic,
Inc. (``Medtronic''), and Intersect ENT, Inc. (``Intersect'')
(together, ``Respondents''). The Consent Agreement is designed to
remedy the anticompetitive effects that otherwise would result from
Medtronic's acquisition of Intersect.
Pursuant to an Agreement and Plan of Merger dated as of August 6,
2021, Medtronic proposes to acquire all of the issued and outstanding
securities of Intersect for approximately $1.1 billion (the
``Acquisition''). The Commission's Complaint alleges that the
Acquisition violated Section 7 of the Clayton Act, as amended, 15
U.S.C. 18, and that the Acquisition agreement constitutes a violation
of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C.
45, by substantially lessening competition in the U.S. markets for
balloon sinus dilation products and ear, nose, and throat (``ENT'')
navigation systems.
The proposed Decision and Order (``Order'') contained in the
Consent Agreement requires Respondents to divest to Hemostasis, LLC
(``Hemostasis'') the assets and business of Intersect's subsidiary
Fiagon AG Medical Technologies (``Fiagon''). Respondents must complete
the transfer no later than 10 days after Medtronic consummates its
acquisition of Intersect. The Commission has issued, and Respondents
have agreed to comply with, an Order to Maintain Assets that requires
Respondents to operate and maintain the divestiture assets in the
normal course of business through the date the approved buyer acquires
the divested assets.
The Commission has placed the Consent Agreement on the public
record for 30 days to solicit comments from interested persons.
Comments received during this period will become part of the public
record. After 30 days, the Commission will review the comments received
and decide whether it should withdraw, modify, or make the proposed
Order final.
II. The Relevant Market and Competitive Effects
The Commission's Complaint alleges that the relevant product
markets in which to analyze the Acquisition are the research,
development, licensing, manufacturing, marketing, distribution, and
sale of (a) balloon sinus dilation products and (b) ENT navigation
systems. Balloon sinus dilation products are catheter devices used to
clear blocked sinuses in patients suffering from chronic
rhinosinusitis. ENT navigation systems allow physicians to view and
track the location of operating instruments such as balloon sinus
dilation products during sinus surgery.
The relevant geographic market in which to analyze the competitive
effects of the Acquisition is the United States. Balloon sinus dilation
products and ENT navigation systems are medical devices subject to
approval by the U.S. Food and Drug Administration before sale in the
United States. As such, medical devices not approved for sale in the
United States do not provide competitive alternatives for U.S.
consumers.
The Acquisition would likely substantially lessen competition in
the relevant markets. The U.S. markets for balloon sinus dilation
products and ENT navigation systems are both highly concentrated. The
Acquisition, if consummated, would reduce the number of independent
manufacturers of balloon sinus dilation products from four to three.
Fiagon, having just entered the U.S. market in 2021 after securing
regulatory approvals for its balloon sinus dilation products, is poised
to become an important competitive constraint on the established ENT
market leaders, including Medtronic. In ENT navigation systems,
Medtronic currently holds a dominant position, and the Acquisition
would eliminate a nascent competitive threat in Fiagon.
III. The Proposed Order and the Order To Maintain Assets
The proposed Order and the Order to Maintain Assets would remedy
the Acquisition's likely anticompetitive effects by requiring
Respondents to
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divest the entirety of the Fiagon business and assets to Hemostasis.
Hemostasis is an established participant in the ENT medical device
segment and has the expertise, sales infrastructure, and resources to
restore the competition that otherwise would have been lost pursuant to
the Acquisition. The parties must divest all facilities and equipment,
intellectual property, business information, and other assets used with
and related to the Fiagon business. Hemostasis also intends to retain
Fiagon employees. Because Hemostasis will acquire all assets related to
the Fiagon business, and the parties are required to obtain all third-
party consents before the divestiture transaction is consummated,
Hemostasis will be able to begin manufacturing its own supply of ENT
navigation systems and balloon sinus dilation products from day one.
The proposed Order contains additional provisions designed to
ensure the effectiveness of the relief. For example, the proposed Order
requires the Respondents to assist and cooperate in the defense against
any intellectual property litigation related to the Fiagon assets.
Respondents are required to provide Hemostasis with transition
assistance for up to one year following the divestiture of the assets
and must cooperate with and assist Hemostasis to evaluate and offer
employment to employees involved in the business and assets subject to
divestiture. Respondents have also agreed not to enforce any employee
noncompete or confidentiality agreements against Hemostasis relating to
employees that interview or accept employment with Hemostasis. The
proposed Order and the Order to Maintain Assets further require
Medtronic to operate and maintain the divestiture assets in the
ordinary course of business, including maintaining the economic
viability, marketability, and competitiveness of the Fiagon business
until the divestiture transaction takes place.
The Commission will appoint Jeryl Hilleman to act as an independent
Monitor to oversee the Respondents' compliance with the requirements of
the Order, and to keep the Commission informed about the status of the
transfer of the Fiagon business to Hemostasis. The proposed Order
requires that the divestiture to Hemostasis be completed no later than
10 days after Medtronic consummates the Acquisition.
In addition to requiring the divestiture of the Fiagon assets and
business, the proposed Order requires Respondents to obtain prior
approval from the Commission before making certain future acquisitions
in the relevant markets for a period of ten years from the date the
Order is issued. The proposed Order also requires Hemostasis to obtain
prior approval from the Commission before transferring any of the
divested assets to any buyer for the first three years after Hemostasis
acquires the divestiture assets. For the seven years following the
initial three-year period, the proposed Order requires Hemostasis to
obtain prior approval from the Commission before transferring any of
the divested assets to any buyer engaged in the research, development,
manufacture, marketing, or sale of any balloon sinus dilation products
or ENT navigation systems.
The purpose of this analysis is to facilitate public comment on the
Consent Agreement, and the Commission does not intend this analysis to
constitute an official interpretation of the proposed Order or to
modify its terms in any way.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2022-10935 Filed 5-19-22; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on May 20, 2022.
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