FTC Orders Ottobock to Undo Freedom Innovations Acquisition

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The Federal Trade Commission has ordered Otto Bock Healthcare (Ottobock), Duderstadt, Germany, to roll back its acquisition of Freedom Innovations, Irvine, California, saying the merger of the two manufacturers would weaken competition in the market for computer-controlled prosthetic knees.

Ottobock acquired Freedom Innovations in September 2017. The FTC issued an administrative complaint in December 2017 saying that the merger "harmed competition in the U.S. market for microprocessor prosthetic knees [MPKs] 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." In May, an administrative law judge recommended to the FTC the divestiture of certain assets of Freedom Innovations by Ottobock.

The commission's order requires Ottobock to divest the assets obtained from Freedom Innovations and its corporate owner, FIH Group Holdings, and sell them to an FTC-approved buyer.

The FTC's final order states, "Based on our de novo review of the facts and law in this matter, we find that the acquisition is likely to, and indeed already has, substantially lessened competition in the relevant market for MPKs.…"

"The Commission is committed to ensuring competitive markets for the benefit of consumers, and there will be times when it has to act after a merger has been consummated," FTC Chairman Joseph Simons said in a statement. "The goal is always to restore the lost competition."