[Federal Register Volume 78, Number 71 (Friday, April 12, 2013)]
[Notices]
[Pages 21950-21952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-08692]


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FEDERAL TRADE COMMISSION

[File No. 121 0184]


Bosley, Inc., a Corporation, and Aderans America Holdings, Inc., 
a Corporation, and Aderans Co., Ltd., a Corporation; Analysis to 
Agreement Containing Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before May 8, 2013.

ADDRESSES: Interested parties may file a comment at http://ftcpublic.commentworks.com/ftc/bosleyaderansconsent online or on paper, 
by following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Bosley Aderans, File 
No. 121 0184'' on your comment and file your comment online at http://ftcpublic.commentworks.com/ftc/bosleyaderansconsent by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
D), 600 Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Justin Stewart-Teitelbaum (202-326-
3597), FTC, Bureau of Competition, 600 Pennsylvania Avenue NW., 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 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 thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for April 8, 2013), on the World Wide Web, at 
http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from 
the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue NW., 
Washington, DC 20580, either in person or by calling (202) 326-2222.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before May 8, 2013. 
Write ``Bosley Aderans, File No. 121 0184'' on your comment. Your 
comment ``including your name and your state'' will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which * * * is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at http://ftcpublic.commentworks.com/ftc/bosleyaderansconsent by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you file your comment on paper, write ``Bosley Aderans, File No. 
121 0184'' on your comment and on the envelope, and mail or deliver it 
to the following address: Federal Trade Commission, Office of the 
Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW, 
Washington, DC 20580. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before May 8, 2013. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted for 
public comment, subject to final approval, an Agreement Containing 
Consent Order (``Consent Agreement'') from Bosley,

[[Page 21951]]

Inc. (``Bosley''), and its corporate parents, Aderans America Holdings, 
Inc. (``Aderans America'') and Aderans Co., Ltd. (``Aderans'') 
(collectively, ``Respondents''). Bosley is the largest manager of 
medical/surgical hair transplantation practices in the United States. 
The Commission's Complaint alleges that Bosley facilitated coordination 
and endangered competition in violation of Section 5 of the Federal 
Trade Commission Act, 15 U.S.C. 45, by exchanging competitively 
sensitive, nonpublic information with HC (USA), Inc. (``Hair Club''). 
Bosley indicated that it exchanged similar information with other 
medical/surgical hair transplantation practitioners.\2\
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    \2\ Pursuant to a Stock Purchase Agreement dated July 13, 2012, 
Aderans plans to acquire all of Hair Club's stock from Regis 
Corporation for $163.5 million. Therefore, Hair Club is not a 
respondent to the Consent Agreement.
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    The proposed Consent Agreement would resolve competitive concerns 
by requiring Bosley: (1) Not to communicate competitively sensitive, 
nonpublic information with any competitor; (2) not to request, 
encourage, or facilitate communication of competitively sensitive, 
nonpublic information from any competitor; and (3) to institute an 
antitrust compliance program to assure ongoing compliance with the 
proposed Decision and Order (``Order'') and with U.S. antitrust laws.
    The proposed Consent Agreement has been placed on the public record 
for thirty (30) days to solicit comments from interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
proposed Consent Agreement and the comments received, and will decide 
whether it should withdraw from the Consent Agreement, modify it, or 
make final the proposed Order.
    The sole purpose of this analysis is to facilitate public comment 
on the Consent Agreement. The analysis does not constitute an official 
interpretation of the Consent Agreement or the proposed Order, nor does 
the analysis modify their terms in any way. Further, the Consent 
Agreement has been entered into for settlement purposes only, and does 
not constitute an admission by Respondents that they violated the law 
or that the facts alleged in the Complaint (other than jurisdictional 
facts) are true.

I. The Complaint

    The allegations of the Complaint are summarized below.
    Bosley and Hair Club are managers of medical/surgical hair 
transplantation with nationwide geographic presence and national brand 
recognition. Bosley is the largest such manager in the United States. 
For at least four years, the chief executive officers (``CEOs'') of 
Bosley and Hair Club repeatedly exchanged competitively sensitive, 
nonpublic information about their companies' medical/surgical hair 
transplantation practices. The information exchanged included details 
about future product offerings, surgical hair transplantation price 
floors and discounts, plans for expansion and contraction, and business 
operations and performance. At the time the CEOs exchanged the 
information, it was not publicly available.
    Bosley considered the information exchanges to be business as 
usual, and as alleged in the Complaint, Bosley indicated that it had 
similar communications with other competitors.

II. Analysis

    Competition may be unreasonably restrained whenever a competitor 
directly communicates, solicits, or facilitates exchange of 
competitively sensitive information with its rivals, particularly where 
such information is highly detailed, disaggregated, and forward-
looking. The risks posed by such communications are three-fold. First, 
a discussion of competitively sensitive prices, output, or strategy may 
mutate into a conspiracy to restrict competition. Second, an 
information exchange may facilitate coordination among rivals that 
harms competition, even in the absence of any explicit agreement 
regarding future conduct. Third, knowledge of a competitor's plans 
reduces uncertainty and enables rivals to restrict their own 
competitive efforts, even in the absence of actual coordination.
    According to the Commission's Complaint, by directly and repeatedly 
exchanging competitively sensitive, nonpublic information with Hair 
Club and other rivals, Bosley engaged in unfair methods of competition 
in violation of Section 5 of the Federal Trade Commission Act. The 
Commission's Complaint alleges that Bosley and Hair Club exchanged 
information on competitively sensitive subjects, including future plans 
to close existing facilities and current strategies regarding price 
discounting. Bosley and Hair Club's alleged tacit understanding to 
exchange the information could facilitate coordination or endanger 
competition by reducing uncertainty about a rival's product offerings, 
prices, and strategic plans. For example, the information exchanges 
could lead a competitor to determine not to open facilities or market 
services in a particular location. Alternatively, a competitor might 
avoid granting additional discounts to maintain existing price levels 
for surgical hair transplantation services. Any or all of these 
decisions could result in consumer harm in the form of reduced choice 
or artificially inflated transaction prices. The potential for harm 
increases to the extent that Bosley engaged in similar communications 
with additional rivals.
    The Commission must weigh the potential for competitive harm from 
direct and repeated exchanges of competitively sensitive, nonpublic 
information against the prospect of legitimate efficiency benefits. The 
Commission's Complaint alleges that the information exchanges between 
Bosley and Hair Club served no legitimate business purpose. 
Specifically, the Commission alleges that in this instance--considering 
the types of information involved, the level of detail, the direct 
nature of the communication, and the absence of any related pro-
competitive impact--the exchanges were potentially anticompetitive and 
lacked a legitimate business justification.

III. The Proposed Consent Order

    The Consent Agreement signed by Respondents contains a proposed 
Order resolving the allegations in the Commission's Complaint. First 
among its provisions, Paragraph II. of the proposed Order enjoins 
Respondents from communicating competitively sensitive, nonpublic 
information directly to any hair transplantation competitor. Paragraph 
II. further prohibits Respondents from requesting, encouraging, or 
facilitating communication of competitively sensitive, nonpublic 
information from any competitor.
    Paragraph II. of the proposed Order would not interfere with 
Respondents' ability to compete or prevent participation in legitimate 
industry practices, such as ordinary trade association or medical 
society activity. Specifically, the proposed Order excludes from its 
prohibitions certain communications including: (1) Where the 
information is reasonably necessary to achieve pro-competitive benefits 
related to a lawful joint venture or as part of legally supervised due 
diligence; (2) provision of rates to market research firms or 
Respondents' own vendors or independent contractors; (3) provision of 
rates or competitive offers to actual or prospective customers; and (4) 
receipt of information from competitors for the purpose of legitimate 
market research

[[Page 21952]]

where the information is not knowingly conveyed to Respondents or their 
representatives (e.g., competitive intelligence).
    In addition, Paragraph III. of the proposed Order requires 
Respondents to institute programs to ensure compliance with the 
proposed Order and U.S. antitrust laws. Paragraph III. requires: (1) 
Annual antitrust compliance training for all Bosley officers, 
executives, employees, and agents whose positions entail contact with 
competitors or who have sales, marketing, or pricing responsibility for 
Respondents' management of medical/surgical hair transplantation 
practice; (2) the provision of legal support to respond to any 
questions regarding antitrust compliance or U.S. antitrust laws; and 
(3) document retention sufficient to record compliance with 
Respondents' obligations under the proposed Order.
    Paragraph IV. requires Respondents to submit periodic compliance 
reports to the Commission. Respondents must provide an initial 
compliance report within sixty (60) days from the date the Order 
becomes final and annually thereafter for the next four (4) years or 
upon written notice by the Commission.
    Pursuant to Paragraph V. of the proposed Order, Respondents must 
also provide notice to the Commission thirty (30) days prior to any 
planned dissolution, acquisition, or other change that may affect 
compliance obligations arising from the proposed Order.
    Paragraph VI. gives the Commission access, upon five (5) days 
written notice, to Respondents' U.S. facilities, records, and employees 
to ensure on-going compliance.
    Paragraph VII. of the proposed Order provides that the proposed 
Order will expire in twenty (20) years.

    By direction of the Commission, Commissioner Wright recused.
Donald S. Clark,
Secretary.
[FR Doc. 2013-08692 Filed 4-11-13; 8:45 am]
BILLING CODE 6750-01-P