[Federal Register Volume 61, Number 196 (Tuesday, October 8, 1996)]
[Notices]
[Page 52799]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25739]



[[Page 52799]]

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FEDERAL TRADE COMMISSION
[File No. 961-0060]


Wesley-Jessen Corporation; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair or deceptive acts or practices and unfair methods of 
competition, this consent agreement, accepted subject to final 
Commission approval, would, among other things, require the Des 
Plaines, Illinois-based maker of opaque contact lenses to divest the 
opaque lens business of its main rival, Pilkington Barnes Hind 
International, Inc. The Commission had alleged that the merger of 
Wesley-Jessen, which manufactures the Durasoft line of opaque lenses, 
and Pilkington Barnes Hind, which makes the Natural Touch line, would 
give the merged firm more than 90 percent of the opaque contact lens 
market, potentially resulting in higher consumer prices and reduced 
innovation or quality for the lenses.

DATES: Comments must be received on or before December 31, 1996.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room H-159, Sixth Street and Pennsylvania Avenue, NW., Washington, DC 
20580.

FOR FURTHER INFORMATION CONTACT:
William J. Baer, Federal Trade Commission, H-374, 6th and Pennsylvania 
Ave, NW., Washington, DC 20580. (202) 326-2932.
    George C. Cary, Federal Trade Commission, H-374, 6th and 
Pennsylvania Ave, NW., Washington, DC 20580. (202) 326-3741.
    Ann Malester, Federal Trade Commission, S-2308, 6th and 
Pennsylvania Ave, NW., Washington, DC 20580. (202) 326-2682.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of 
the Commission's Rules of Practice (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 sixty (60) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the accompanying complaint. An electronic copy of the 
full text of the consent agreement package can be obtained from the FTC 
Home page, on the World Wide Web, at ``http://www.ftc.gov/os/actions/
htm.'' A paper copy can be obtained from the FTC Public Reference Room, 
Room H-130, Sixth Street and Pennsylvania Avenue, NW., Washington, DC 
20580. Public comment is invited. Such comments or views will be 
considered by the Commission and will be available for inspection and 
copying at its principal office in accordance with Section 
4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted subject 
to final approval an agreement containing a proposed Consent Order from 
Wesley-Jessen Corporation (``Wesley-Jessen'') which requires Wesley-
Jessen to divest the opaque contact lens business of Pilkington Barnes 
Hind International, Inc. (``PBH'') to a Commission-approved purchaser 
by January 24, 1997, four (4) months from the date the agreement was 
signed. PBH's Opaque Lens Business includes an exclusive license under 
PBH's patents and a non-exclusive license under other patents owned by 
Wesley-Jessen relating to the manufacture and sale of opaque lenses in 
the United States. Further, Wesley-Jessen has agreed to enter into a 
contract manufacturing supply agreement which requires Wesley-Jessen to 
supply the acquirer with PBH's opaque lenses while the acquirer obtains 
its own FDA approvals.
    Opaque contact lenses are lenses that completely change the color 
of the wearer's eyes, e.g., wearing opaque lenses, a brown-eyed person 
can appear blue-eyed. Wesley-Jessen and PBH dominate the opaque lens 
market in the United States, accounting for over 90% of all opaque lens 
sales. Wesley-Jessen, in acquiring PBH, is buying its main rival in the 
opaque contact lens market. The possibility of new entry in response to 
a post-merger price increase is very remote because of barriers 
presented by broad industry patents governing the design and 
manufacture of opaque lenses. The proposed complaint alleges that the 
acquisition, if consummated, would result in higher prices, lower 
quality and less innovation in the opaque contact lens market.
    On March 27, 1996, Wesley-Jessen and PBH signed a Letter of Intent 
whereby Wesley-Jessen would acquire 100 percent of the voting 
securities of PBH, voting securities of certain foreign issuers 
controlled by PBH and certain assets located outside the United States 
for approximately $80 million. The proposed complaint alleges that the 
proposed acquisition would violate Section 7 of the Clayton Act, as 
amended, 15 U.S.C. 18, and Section 5 of the FTC Act, as amended, 15 
U.S.C. 45, in the market for the sale of opaque contact lenses in the 
United States.
    The proposed Consent Order preserves competition in the opaque 
contact lens market while allowing Wesley-Jessen to increase production 
and sales volumes in its broader conventional contact lens business. 
The proposed Order would remedy the alleged violation in the opaque 
contact lens market by ensuring that an acquirer of the PBH Opaque Lens 
Business would be in the same competitive position that PBH is in today 
as a manufacturer and seller of opaque contact lens in the United 
States. The Order requires that the acquirer secure the requisite FDA 
approvals to begin its own production of opaque contact lenses within 
eighteen months from Commission approval of the acquirer.
    Additionally, the proposed Consent Order provides that within three 
(3) months of the date the Order is signed, the Commission may appoint 
a trustee to monitor Wesley-Jessen's and the acquirer's performance of 
their respective responsibilities. In the event that Wesley-Jessen has 
not divested the PBH Opaque Lens Business within four (4) months to an 
acquirer approved by the Commission, the Commission may direct the 
trustee described earlier in this paragraph to divest PBH's Opaque Lens 
Business.
    Also, the Consent Order prohibits Wesley-Jessen, for a period of 
ten (10) years, from acquiring any interest in any entity engaged in 
the development, manufacturer and sale of opaque contact lenses in the 
United States without prior notice to the Commission.
    The proposed Consent Order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
Order.
    The purpose of this analysis is to facilitate public comment on the 
proposed Order, and it is not intended to constitute an official 
interpretation of the agreement and proposed Order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 96-25739 Filed 10-7-96; 8:45 am]
BILLING CODE 6750-01-M