FTC Challenges Ottobock, Freedom Innovations Merger

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The Federal Trade Commission (FTC) has issued an administrative complaint challenging the recent acquisition of FIH Group Holdings (owner of Freedom Innovations, Irvine, California,) by Otto Bock HealthCare, Duderstadt, Germany (aka Ottobock), saying that the merger "harmed competition in the U.S. market for microprocessor prosthetic knees by eliminating head-to-head competition between the two companies, removing a significant and disruptive competitor, and entrenching Otto Bock's position as the dominant supplier."

Ottobock has agreed to a Hold Separate and Asset Maintenance Agreement with the FTC under which the company will take steps to ensure the preservation and health of the former Freedom Innovations business and preserve its viability.

"New entry or expansion by other manufacturers of microprocessor knees is not likely to be timely or sufficient to offset the anticompetitive effects of the merger," according to the FTC. The complaint stated that it routinely takes firms more than two years just to develop a microprocessor knee, even when they are building on existing microprocessor knee technology.

In addition to issuing an administrative complaint, the FTC authorized its staff to seek a temporary restraining order, preliminary injunction, and ancillary relief in federal court, should doing so be necessary to ensure the Freedom Innovations business remains viable and to preserve the FTC's ability to order effective relief if it should halt the merger.