The Federal Trade Commission (FTC) recently announced a settlement with IDEXX Laboratories, Inc. that prohibits IDEXX from maintaining concurrent exclusive dealing agreements with three major national point-of-care (POC) diagnostic testing product distributors. POC products are used to diagnose and treat conditions such as heart worm in pets. In 2009, nearly 75% of veterinarians used POC diagnostic products, 85% of which were purchased from a small number of top tier distributors.

In its complaint, the FTC charged IDEXX with violating Section 5 of the FTC Act by using exclusive arrangements to exclude competition from using key distributors to maintain a virtual monopoly in the US POC diagnostics market. The exclusive arrangements included both:

The FTC alleged that because IDEXX held nearly 70% of the POC diagnostics market from 2006-2011, the distributors were forced to comply or else lose most of their supply. The FTC further alleged that IDEXX's conduct adversely affected competition by:

Because IDEXX suffered inefficiencies by over-subscribing to distributors, the FTC also found no procompetitive effects of its behavior.

The settlement prohibits IDEXX from entering into or maintaining exclusive distribution agreements with all three of the top national distributors for the next ten years. For any future non-exclusive arrangement with a national distributor, IDEXX also must:

Each year for a period of four years, IDEXX must also submit to the FTC a report detailing its compliance with the settlement terms.