[Federal Register Volume 75, Number 23 (Thursday, February 4, 2010)]
[Notices]
[Pages 5796-5798]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-2460]


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FEDERAL TRADE COMMISSION

[File No. 091 0159]


Danaher Corporation and MDS, Inc.; Analysis of Agreement 
Containing Consent Orders 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 March 1, 2010.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``DanaherMDS, 
File No. 091 0159'' to facilitate the organization of comments. Please 
note that your comment -- including your name and your state -- will be 
placed on the public record of this proceeding, including on the 
publicly accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm).
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual'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. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential. . . .,'' as provided in 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 
4.10(a)(2), 16 CFR 4.10(a)(2). 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), 16 CFR 4.9(c).\1\
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 
4.9(c).
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    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: (https://public.commentworks.com/ftc/DanaherMDS) and following the instructions 
on the web-based form. To ensure that the Commission considers an 
electronic comment, you must file it on the web-based form at the 
weblink: (https://public.commentworks.com/ftc/DanaherMDS). If this 
Notice appears at (http://www.regulations.gov/search/index.jsp), you 
may also file an electronic comment through that website. The 
Commission will consider all comments that regulations.gov forwards to 
it. You may also visit the FTC website at (http://www.ftc.gov/) to read 
the Notice and the news release describing it.
    A comment filed in paper form should include the ``DanaherMDS, File 
No. 091 0159'' reference both in the text and on the envelope, and 
should be mailed or delivered to the following address: Federal Trade 
Commission, Office of the Secretary, Room H-135 (Annex D), 600 
Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting 
that any comment filed in paper form be sent by courier or overnight 
service, if possible, because U.S. postal mail in the Washington area 
and at the Commission is subject to delay due to heightened security 
precautions.
    The Federal Trade Commission Act (``FTC Act'') and other laws 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, 
whether filed in paper or electronic form. Comments received will be 
available to the public on the FTC website, to the extent practicable, 
at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of 
discretion, the Commission makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC website. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).

[[Page 5797]]


FOR FURTHER INFORMATION CONTACT: Michael R. Moiseyev (202-326-3106) or 
Lynda Lao (202-326-3054), Bureau of Competition, 600 Pennsylvania 
Avenue, NW, Washington, D.C. 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 the 
Commission 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 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 January 27, 2010), 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, 
D.C. 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order to Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted from 
Danaher Corporation (``Danaher'') and MDS, Inc. (``MDS''), subject to 
final approval, an Agreement Containing Consent Orders (``Consent 
Agreement''), which is designed to remedy the anticompetitive effects 
resulting from Danaher's acquisition of the stock and assets of MDS 
Analytical Technologies (US) Inc. (``MDS Analytical Technologies''), a 
subsidiary of MDS.
    Under the terms of the Consent Agreement, Danaher will divest the 
assets of MDS's Arcturus business segment, which includes assets 
relating to the manufacture and sale of laser microdissection devices 
and associated reagent products, to Life Technologies Corp. (``Life 
Technologies'') within 10 days after the date the Decision and Order 
(``Order'') becomes final. The proposed Consent Agreement has been 
placed on the public record for 30 days to solicit comments from 
interested persons. Comments received during this period will become 
part of the public record. After 30 days, the Commission will again 
review the proposed Consent Agreement and will decide whether it should 
withdraw from the proposed Consent Agreement, modify it, or make it 
final.
    On September 2, 2009, Danaher entered into an agreement to acquire 
the stock and assets of MDS Analytical Technologies from MDS. The 
Commission's complaint alleges the facts described below and 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 FTC Act, as 
amended, 15 U.S.C. 45, by lessening competition in the market for laser 
microdissection devices.

II. The Parties

    Danaher, headquartered in Washington, DC, is a global supplier of 
professional, medical, industrial, commercial, and consumer products. 
Danaher's Leica Microsystems (``Leica'') business operates within its 
Medical Technologies segment. Leica manufactures and sells laser 
microdissection devices.
    Headquartered in Mississauga, Ontario, MDS is a life sciences 
company that operates three core businesses, MDS Analytical 
Technologies, MDS Nordion, and MDS Pharma Services. MDS's Arcturus 
business, which assembles and sells laser microdissection devices and 
chemical reagents, is a part of MDS Analytical Technologies.

III. Laser Microdissection Devices

    Laser microdissection devices are used to separate small groups of 
cells -- or even a single cell -- from larger tissue samples for 
specialized tests, such as DNA analysis, RNA analysis, or protein 
profiling. These devices are fully integrated machines that incorporate 
a laser, a computer, and a monitor with a microscope. Laser 
microdissection is a particularly useful technique in the fields of 
molecular pathology, cell biology, oncology, and forensic medicine 
where scientists and researchers must separate small cell samples from 
heterogeneous tissue in order to analyze disease progression and 
develop more targeted treatments. For these scientists and researchers, 
the evidence indicates that laser microdissection devices constitute a 
relevant market for antitrust inquiry. Although other techniques exist 
for separating cells or proteins, none are as precise or reliable as 
laser microdissection. Accordingly, if the price of laser 
microdissection devices were to increase by five or ten percent, 
customers would not switch to any other technique or device.
    The relevant geographic area in which to evaluate the market for 
laser microdissection devices is no larger than North America. 
Customers are unwilling to consider laser microdissection device 
suppliers that do not have a service and support infrastructure that 
can provide a timely response to a maintenance call. Additionally, 
customers in North America strongly prefer laser microdissection 
suppliers that have an established reputation among their colleagues in 
the United States and the rest of North America. Whether the geographic 
market is defined as North America or the United States, however, is 
unlikely to have any impact on the ultimate antitrust analysis because 
the same firms compete in each area.
    With only four current competitors, the market for laser 
microdissection devices is highly concentrated. The proposed 
acquisition would combine Danaher's Leica brand of laser 
microdissection devices with MDS's Arcturus brand, leaving only three 
viable competitors. Laser microdissection devices are generally 
purchased through a competitive evaluation process. The four available 
products are highly differentiated, which leads to competition in a 
number of areas, including features, reliability, performance, price, 
and service. The elimination of the direct competition between the 
Leica and Arcturus devices could allow Danaher to exercise market power 
unilaterally by increasing prices or decreasing innovation or service, 
particularly to those customers who view Leica and Arcturus as their 
top two choices.
    Neither new entry nor repositioning and expansion sufficient to 
deter or counteract the anticompetitive effects of the proposed 
acquisition in the laser microdissection market is likely to occur 
within two years. A de novo entrant to the laser microdissection market 
would face significant impediments to timely and sufficient entry. A 
firm would have to design, develop, and test a product with at least 
comparable functionality to the existing devices, which would also 
require navigating around the patents of the current competitors. 
Furthermore, a new entrant would have to establish a service and 
support infrastructure in North America. Perhaps most importantly, a 
new entrant would have to engage leading researchers and practitioners 
to develop a reputation for quality and reliability. For existing 
foreign firms that currently sell laser

[[Page 5798]]

microdissection devices outside of North America, cultivating the 
necessary reputation is a major barrier to competitively significant 
entry into the North American market. It can take several years to 
acquire a reputation on par with the current laser microdissection 
device brands in order to make a significant market impact. 
Accordingly, entry by a foreign firm is unlikely to make a significant 
market impact sufficient to counteract any anticompetitive effects from 
the proposed transaction within the next two years.

IV. The Consent Agreement

    The proposed Consent Agreement eliminates the competitive concerns 
raised by Danaher's proposed acquisition of MDS Analytical Technologies 
by requiring the divestiture of MDS's assets relating to the 
manufacture and sale of laser microdissection devices. Danaher and MDS 
have agreed to sell the Arcturus assets, including the laser 
microdissection device business, as well as a related reagents 
business, to Life Technologies within 10 days after the date the Order 
becomes final.
    Life Technologies possesses the knowledge, experience, and 
financial viability to successfully purchase and manage the divestiture 
assets and replace MDS as an effective competitor in the laser 
microdissection market. Headquartered in Carlsbad, California, Life 
Technologies is a life sciences company that manufactures and sells 
scientific research equipment that it distributes throughout the world. 
Life Technologies does not currently compete against Danaher and MDS in 
the sale of laser microdissection devices, but it does manufacture and 
sell reagents for downstream analysis using tissue samples obtained 
through laser microdissection. The Arcturus business would be a natural 
fit into Life Technologies's product portfolio, since both sets of 
products are marketed to the same customer base.
    Pursuant to the Consent Agreement, Life Technologies would receive 
all the assets necessary to operate MDS's current laser microdissection 
business, including equipment used to assemble the Arcturus laser 
microdissection device, Arcturus software, and reagents that are sold 
as complementary downstream products to Arcturus customers. In addition 
to key Arcturus employees, who would be made available to Life 
Technologies, the Consent Agreement requires MDS to provide Life 
Technologies with access to certain other employees who may be needed 
to facilitate the transition of the Arcturus laser microdissection 
assets. The Consent Agreement also requires MDS to transfer all the 
Arcturus intellectual property, including patent licenses for infrared 
laser microdissection device technology. Divestiture of all of the 
Arcturus laser microdissection assets will ensure that Life 
Technologies has a full line of high-quality laser microdissection 
devices, enabling it to compete immediately with the merged entity.
    The Commission may appoint an interim monitor to oversee the 
divestiture of the Arcturus laser microdissection business at any time 
after the Consent Agreement has been signed. In order to ensure that 
the Commission remains informed about the status of the proposed 
divestitures, the proposed Consent Agreement requires the parties to 
file periodic reports with the Commission until the divestiture is 
accomplished. If the Commission determines that Danaher has not fully 
complied with its obligations under the Order within 10 days after the 
date the Order becomes final, the Commission may appoint a divestiture 
trustee to divest the Arcturus assets to a Commission-approved 
acquirer.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official 
interpretation of the proposed Order or the Agreement to Maintain 
Assets, or to modify their terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2010-2460 Filed 2-3-10: 7:15 am]
BILLING CODE 6750-01-S