Hair Transplant Provider Settles FTC Charges That It Exchanged Competitively Sensitive Information with Rival Hair Club

This posting was written by Jeffrey May, Editor of  Trade Regulation Reporter.

"For at least four years, Bosley’s and Hair Club’s chief executive officers repeatedly exchanged competitively sensitive, nonpublic information regarding aspects of their firms’ surgical hair transplantation business," the FTC alleged in a complaint announced today against Bosley, Inc. Bosley has agreed to settle the FTC charges that it engaged in unfair methods of competition in violation of Sec. 5 of the FTC Act (In the Matter of Bosley, Inc., FTC File No. 121 0184).

The complaint names Bosley, as well as Aderans America Holdings, Inc. and parent company Aderans Co., Ltd. HC (USA), Inc.—Hair Club—was not named as a respondent in the complaint because Aderans plans to acquire all of Hair Club’s stock from Regis Corporation.

Bosley provides medical and surgical hair restoration services. Hair Club provides nonsurgical hair restoration and hair therapy products. Hair Club manages medical/surgical hair restoration practices, including providing input on pricing, according to the FTC.

The FTC alleges that Bosley’s and Hair Club’s CEOs directly exchanged detailed information about future product offerings, surgical hair transplantation price floors, discounting, forward-looking expansion and contraction plans, and operations and performance. The conduct facilitated coordination and endangered competition and served no legitimate business purpose, the agency contends. Bosley purportedly provided competitively sensitive information to other competitors, as well.

A proposed FTC consent order would prohibit the respondents from communicating competitively sensitive, non-public information to a competitor or requesting, encouraging, or facilitating the communication of competitively sensitive, non-public information from a competitor. There are exemptions for legitimate information exchanges.

The consent order also would require the establishment of an antitrust compliance program. In addition, Bosley would be required to submit periodic compliance reports to the FTC.