[Federal Register Volume 85, Number 58 (Wednesday, March 25, 2020)]
[Notices]
[Pages 16939-16943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06212]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 191 0082]


Danaher Corporation; Analysis of Agreement Containing Consent 
Orders To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis of Agreement Containing Consent Order to Aid 
Public Comment describes both the allegations in the 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 April 24, 2020.

[[Page 16940]]


ADDRESSES: Interested parties may file comments online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write: ``Danaher 
Corporation; File No. 191 0082'' on your comment, and file your comment 
online at https://www.regulations.gov by following the instructions on 
the web-based form. If you prefer to file your comment on paper, please 
mail your comment to the following address: Federal Trade Commission, 
Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 
(Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Lisa DeMarchi Sleigh (202-326-2535), 
Bureau of Competition, Federal Trade Commission, 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 of Agreement Containing Consent Order 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 website (for 
March 19, 2020), at this web address: https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 24, 2020. 
Write ``Danaher Corporation; File No. 191 0082'' 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 https://www.regulations.gov website.
    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 through the https://www.regulations.gov website.
    If you prefer to file your comment on paper, write ``Danaher 
Corporation; File No. 191 0082'' on your comment and on the envelope, 
and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex D), Washington, DC 20580; or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure that your comment does not include any sensitive or 
confidential information. In particular, your comment should not 
include any sensitive personal information, such as your or anyone 
else'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 your comment 
does not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, your comment should not include any ``trade secret or any 
commercial or financial information which . . . is privileged or 
confidential''--as provided by 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)--including in 
particular competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website 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 April 24, 2020. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Order To Aid Public Comment

Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Danaher Corporation (``Danaher'') designed to remedy 
the anticompetitive effects resulting from Danaher's proposed 
acquisition of the GE Biopharma business of General Electric Company's 
(``GE'') GE Healthcare Life Sciences division. Under the terms of the 
proposed Consent Agreement, Danaher is required to divest all of the 
rights and assets related to the following products to Sartorius AG 
(``Sartorius''): (1) Microcarrier beads; (2) conventional low-pressure 
liquid chromatography (``LPLC'') columns; (3) conventional LPLC skids; 
(4) single-use LPLC skids; (5) three affected chromatography resins; 
(6) LPLC continuous chromatography systems; (7) single-use TFF systems; 
and (8) label-free molecular characterization instruments.
    The proposed Consent Agreement has been placed on the public record 
for thirty days for receipt of comments by interested persons. Comments 
received during this period will become part of the public record. 
After thirty days, the Commission will review the comments received and 
decide whether it should withdraw, modify, or make the Consent 
Agreement final.
    Under the terms of the Equity and Asset Purchase Agreement dated 
February 25, 2019, Danaher will acquire the GE Biopharma business in 
exchange for $21.4 billion (the ``Acquisition''). The Commission's 
Complaint alleges that the proposed Acquisition, if consummated, would 
violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and 
Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 
45, by substantially lessening

[[Page 16941]]

competition in the markets for: (1) Microcarrier beads; (2) 
conventional low-pressure liquid chromatography (``LPLC'') columns; (3) 
conventional LPLC skids; (4) single-use LPLC skids; (5) three affected 
chromatography resins; (6) LPLC continuous chromatography systems; (7) 
single-use TFF systems; and (8) label-free molecular characterization 
instruments. The proposed Consent Agreement will remedy the alleged 
violations by preserving the competition that otherwise would be lost 
in these markets as a result of the proposed Acquisition.

The Parties

    Headquartered in Washington, DC, Danaher is a leading global 
manufacturer of professional, medical, industrial, and commercial 
products and services through more than twenty operating companies. 
Danaher sells bioprocessing products primarily through its wholly owned 
subsidiary Pall Corporation (``Pall''), including instruments and 
consumables that support research, discovery, process development, and 
manufacturing workflows of biopharmaceutical drugs. Danaher sells other 
life science instruments, including molecular characterization used 
primarily in biopharmaceutical research applications, through its 
Molecular Devices, LLC operating company.
    GE is a global conglomerate headquartered in Boston, Massachusetts. 
GE Biopharma is a division of GE Healthcare Life Sciences that 
manufactures and sells instruments, consumables, and software that 
support the research, discovery, process development, and manufacturing 
workflows of biopharmaceutical drugs.

Products and Market Structures

I. Microcarrier Beads

    Microcarrier beads are used in cell culture bioprocessing. They 
provide a surface for the anchorage of dependent cells to attach and 
grow in cell culture vessels and bioreactors. Danaher and GE are the 
two leading global suppliers of microcarrier beads and are each other's 
closest competitors. The only other significant supplier of 
microcarrier beads is Corning, Inc., which is substantially smaller 
than GE, the dominant supplier. The market for microcarrier beads is 
highly concentrated. The parties have a combined market share of 
greater than 70 percent. The Acquisition would increase concentration 
in the microcarrier bead market substantially and reduce the number of 
major suppliers from three to two.

II. Conventional Low-Pressure Liquid Chromatography Columns

    LPLC columns separate wanted from unwanted molecules by using a 
liquid or gaseous phase to carry the cell mass through an adsorbent 
serving as a stationary phase. Conventional LPLC columns are containers 
that hold chromatography resins used as the adsorbent during the 
stationary phase. These columns are made of glass, stainless steel, 
acrylic glass, or plastic. This market is highly concentrated, with 
only four main suppliers, including Danaher and GE. The parties have a 
combined market share of greater than 45 percent. Further, Danaher and 
GE are two of very few suppliers that offer larger, process-scale 
conventional LPLC columns, which is a segment of the market that is 
even more concentrated. Other remaining chromatography suppliers 
consist of fringe of firms, each of which account for a small share of 
the market.

III. Conventional Low-Pressure Liquid Chromatography Skids

    Conventional LPLC skids control the flow of liquid in the 
chromatography process. Conventional LPLC skids contain a system of 
pumps, valves, sensors, tubing, electronic components, software, and 
flow paths composed of multi-use components. GE is the leading supplier 
of conventional LPLC skids with a market share of over 30 percent. 
Danaher and GE currently compete directly for sales in the market for 
conventional LPLC skids, and there are few other significant suppliers. 
The Acquisition would substantially increase concentration in the 
market for conventional LPLC skids.

IV. Single-Use Low Pressure Liquid Chromatography Skids

    Single-use LPLC skids control the flow of liquid in the 
chromatography process and have the same function as conventional LPLC 
skids except that the flow path is composed of single-use components. 
As is the case for conventional ones, GE is the dominant supplier of 
single-use LPLC skids. According to market participants, in addition to 
GE and Danaher are two of only three significant suppliers. The only 
other suppliers are fringe firms with few sales. Danaher and GE have a 
combined market share of greater than 80 percent for single-use LPLC 
skids.

V. Chromatography Resins

    Chromatography resins are chemically treated consumables that 
constitute the stationary phase of the LPLC process. The parties both 
supply resins, although GE has a broad portfolio of resins while 
Danaher has more limited offerings. Each resin type differs in its 
chemical characteristics and features, and specific purification and 
production steps require different resins for the processing of 
particular molecules. Because of their distinct attributes and uses, 
each type of resin appears to constitute a distinct antitrust market. 
The parties have competitively significant overlaps in three resin 
markets: Affinity resins, ion exchange resins, and mixed mode resins. 
Affinity resins use binding interactions between a ligand and its 
binding partner to capture the target molecule. Ion exchange resins 
separate molecules based on their total electric charge. Mixed mode 
resins use matrices functionalized with ligands capable of multiple 
interactions that make this type of resin useful to purify target 
proteins when other methods fail.
    Danaher and GE are two of a limited number of competitors in the 
markets for affinity, ion exchange, and mixed mode resins. Similar to 
the markets for chromatography hardware, GE is dominant in 
chromatography resins, holding market shares of between 65 and 73 
percent, 57 and 65 percent, and 56 and 64 percent in affinity, ion 
exchange, and mixed mode resins, respectively, while Danaher's market 
share is significant but no greater than ten percent in each resin 
market.

VI. Low-Pressure Liquid Chromatography Continuous Chromatography 
Systems

    A LPLC continuous chromatography system consists of a skid and 
columns that functions by regulating the flow of resins through the 
affixed columns in a continuous process that, for some uses, provides 
greater efficiency and cost savings. The parties, however, appear to be 
the leading suppliers in the market. Currently, Danaher has 
approximately 28 percent market share and GE has approximately 14 
percent share. Only three other suppliers compete in this market, and 
the combined firm would have a market share of over 40 percent.

VII. Single-Use Tangential Flow Filtration Systems

    Single-use TFF systems control the filtration process, which 
removes unwanted molecules during the cell growth phase of the 
bioprocessing workflow by running liquids through porous membranes. 
Single-use TTF systems include sensors, valves, safety and security 
items, software, and network communication hardware, as

[[Page 16942]]

well as flow kits, manifolds, and pumps composed of single-use 
components. Customers typically use TFF for cell clarification and for 
diafiltration, concentration, and microfiltration. TFF systems are 
configurable as conventional or single-use platforms. With single-use 
TFF systems, suppliers sell disposable flow kits (single-use tubing) 
that are used as a consumable. In contrast, conventional TFF systems 
are made with stainless steel and must be cleaned and validated after 
each use. Customers typically do not switch between single-use and 
conventional TFF systems, and they do not view other types of 
filtration systems as an economic or practical substitute for single-
use TFF systems. Danaher and GE are two important competitors in the 
market for single-use TFF systems. GE's system has gained share since 
recently entering the market and currently competes closely with 
Danaher's system. The parties have a combined share of the single-use 
TFF filtration systems market of more than 35 percent.

VIII. Label-Free Molecular Characterization Instruments

    Label-free molecular characterization instruments characterize 
protein binding interaction and protein concentration based on 
measurement of the optical, calorimetric, electrical, acoustic, and 
other physical reactions to various stimuli. Researchers use these 
instruments for a number of applications, including drug discovery and 
other biological research. Label-free molecular characterization 
instruments are a distinct relevant product market within the broader 
universe of molecular characterization instruments By their own 
estimates Danaher has approximately 23 percent share and GE has about 
39 percent leaving the combined firm with share greater than 60 
percent. The remainder of the market is highly fragmented and consists 
of less established instrument manufacturers and firms offering niche 
products.

Competitive Effects of the Acquisition

    The proposed Acquisition would likely result in substantial 
competitive harm to consumers in the markets for microcarrier beads; 
conventional LPLC columns; conventional LPLC skids; single-use LPLC 
skids; three chromatography resins; LPLC continuous chromatography 
systems; single-use TFF systems; and label-free molecular 
characterization. The parties are two of few significant suppliers of 
these products worldwide. Eliminating the head-to-head competition 
between Danaher and GE in these concentrated markets would allow the 
combined firm to exercise market power unilaterally, likely resulting 
in higher prices, reduced innovation, and less choice for consumers.

Entry Conditions

    De novo entry in the relevant markets would not be timely, likely, 
or sufficient in magnitude, character, and scope to deter or counteract 
the anticompetitive effects of the proposed Acquisition. Entry into 
each of the relevant product markets requires a significant amount of 
time and resources. In each relevant market, a new entrant would need 
to develop products with high levels of performance and reliability to 
establish the brand recognition necessary to compete effectively due to 
the premium customers place on suppliers' track records and reputations 
for reliable, high-quality products. Attaining requisite technological 
expertise and intellectual property often prevents suppliers from 
developing new products in the relevant markets. These barriers can 
delay the launch of new products and prevent existing suppliers of 
other equipment from developing new projects. Moreover, a potential 
entrant must establish a sufficient sales force that offers high-
quality technical support and is capable of establishing relationships 
with customers. Such development efforts are difficult, time-consuming, 
and expensive, and often fail to result in a competitive product 
reaching the market.

The Consent Agreement

    The Consent Agreement eliminates the competitive concerns raised by 
the proposed Acquisition by requiring Danaher to divest its 
microcarrier beads; chromatography hardware including conventional LPLC 
chromatography columns, conventional LPLC chromatography skids, and 
single-use LPLC chromatography skids; three chromatography resins; LPLC 
continuous chromatography systems; single-use TFF filtration systems; 
and label-free molecular characterization instruments to Sartorius. 
Danaher must divest all assets and rights to research, develop, 
manufacture, market, and sell these products, including all related 
intellectual property and other confidential business information, 
manufacturing technology, existing inventory, and all related 
agreements to manufacture and distribute the products. Additionally, to 
ensure that the divestiture is successful and to maintain continuity of 
supply, the proposed Order requires Danaher to supply Sartorius with 
these products for a limited time while Sartorius establishes its own 
manufacturing capability. Further, the proposed Order requires 
Sartorius to seek the Commission's approval in the event that it seeks 
to sell certain divested assets or acquire certain assets that compete 
with the divested assets for a period of three years. The provisions of 
the Consent Agreement ensure that Sartorius becomes an independent, 
viable, and effective competitor to maintain the competition that 
currently exists.
    Based in G[ouml]ttingen, Germany, Sartorius is a leading provider 
of instruments, manufacturing systems, and associated consumables for 
the life sciences industry including bioprocessing equipment used for 
drug discovery, development, and commercialization. Sartorius's 
existing biopharma business includes products that are highly 
complementary to the divestiture assets. Sartorius has the expertise, 
worldwide sales infrastructure, and resources to restore the 
competition that otherwise would have been lost due to the proposed 
Acquisition.
    Danaher must accomplish the divestitures no later than 45 days 
after consummating the proposed Acquisition or ten days after receiving 
all regulatory approvals necessary to consummate the divestiture. Until 
Danaher completes the divestiture, the proposed Order requires Danaher 
to hold separate the entire Pall operating company and the molecular 
characterization business, as well as to maintain the divested assets. 
Danaher is also required to submit compliance reports to staff and to 
the proposed monitor demonstrating compliance with these asset 
maintenance provisions.
    If the Commission determines that Sartorius is not an acceptable 
acquirer, or that the manner of the divestitures is not acceptable, the 
proposed Order requires Danaher to unwind the sale of rights and assets 
to Sartorius and then divest the affected products to a Commission-
approved acquirer within six months of the date the Order becomes 
final. To ensure compliance with the Order, the Commission has agreed 
to appoint a Monitor to ensure that Danaher complies with all of its 
obligations pursuant to the Consent Agreement and to keep the 
Commission informed about the status of the transfer of the product 
rights and assets to Sartorius. The proposed Order further allows the 
Commission to appoint a trustee in the event that Danaher fails to 
divest the products as required.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official

[[Page 16943]]

interpretation of the proposed Order or to modify its terms in any way.

    By direction of the Commission.
April J. Tabor,
Acting Secretary.
[FR Doc. 2020-06212 Filed 3-24-20; 8:45 am]
BILLING CODE 6750-01-P