Wesley-Jessen Corporation; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 961-0060]

Wesley-Jessen Corporation; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Consent agreement.

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

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