My Aching Hip, Part III - An Invitation to Collude
EasyBourse has an interesting piece on the events giving rise to the current DoJ probe into the orthopedics market. Looks like an invitation to collude case to me:
According to Zimmer [Holdings, Inc. - ZMH], which released second-quarter results after the closing bell Wednesday, a string of events appears to have touched off the probe. In the fall of 2005, a representative at a hospital sent an email to orthopedics companies with a bid proposal regarding orthopedic implant pricing, Zimmer said in its earnings release, which also detailed the antitrust investigation. “Upon receipt of that email, a representative of one of Zimmer’s competitors sent an unsolicited message to the same group of competitors that received the hospital’s original message,” Zimmer said. “The competitor’s email proposed that the orthopaedic companies adopt a uniform pricing strategy in responding to this hospital.” Zimmer did not name the competitor company in question. Zimmer and its local independent distributor rejected this proposal, stating “emphatically” in writing that neither Zimmer nor the distributor would participate in the pricing discussions with competitors, Zimmer said.
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July 28th, 2006 at 4:37 pm
Does it seem odd that the point of the current subpoenas is a Fall of 2005 “solicitation”, particularly in light of the careful limitation language in the Zimmer website press release? Is it possible that the Antitrust Division suspects that the “solicitation” was in fact accepted by some or all in spite of the formal declination?