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FTC Looks At Baby Formula Makers For Collusion

 |  May 24, 2023

The US Federal Trade Commission is investigating whether companies producing baby formula, including Abbott Laboratories, engaged in collusion during state contract bidding, as per a document published on the agency’s website.

The FTC is investigating potential collusion or coordination by the companies involved in the bidding, as stated in the document.

In 2022, the FTC initiated an investigation into possible collusion or coordination among bidders for the Women, Infants and Children (WIC) program, which provides free formula to low-income families on behalf of the U.S. Department of Agriculture.

According to the document, studies indicated that winning contracts not only generated revenue but also resulted in improved commercial sales.

Related: FTC & DOJ Are On Alert For Collusion In US Labor Markets

“Although the boost in non-WIC sales motivates manufacturers to win WIC contracts, it may also create incentives to engage in collusive or coordinated market allocation, whereby incumbent WIC contract holders agree not to bid against each other,” the document, written by Commissioner Alvaro Bedoya, said.

The antitrust agency requested information on the company’s formula sales that were not included in the program.

A spokesperson for Abbott said that the company was cooperating with the FTC’s information requests, and pointed out a filing to the FTC where the company said: “Abbott is unaware of any factual basis to support the WIC-related investigation, and staff have not identified any reason to believe that Abbott or any of its competitors have coordinated or colluded regarding any WIC contract.”