
A member of the US Federal Trade Commission (FTC) says the agency should review its 2012 decision to approve the acquisition of a small ventilator company by medical-device maker Covidien, a deal that may have stymied a government effort to produce the machines.
FTC Commissioner Rebecca Kelly Slaughter, a Democrat at the Republican-controlled commission, said Monday she wants to know more about what the companies disclosed to the agency when the FTC granted antitrust approval of the merger without an in-depth investigation.
The New York Times reported that US health officials, worried about a shortage of ventilators over a decade ago, contracted with a small California device maker, Newport Medical Instruments Inc., to produce inexpensive, easy-to-use machines to add to the national stockpile. Newport planned to sell the devices for about a third of the price that other companies were charging. Covidien, which also made ventilators, agreed to buy Newport for US$108 million, and then sought to get out of the contract, according to the Times. The government agreed to cancel the agreement.
The failure of the project to produce ventilators now raises questions about whether Covidien bought Newport in order to block competition from a rival product and protect its own ventilator business and whether the transaction received the appropriate scrutiny from federal antitrust officials.
Antitrust enforcers are paying increasing attention to whether companies are buying emerging rivals as a way to eliminate emerging threats to their businesses, sometimes by shutting them down. FTC Chairman Joe Simons said in February the agency would investigate small acquisitions by the biggest US technology companies to determine if the deals were anticompetitive.
Full Content: Bloomberg
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