The Federal Trade Commission (FTC) has authorized the Bureau of Competition to file suit blocking Edgewell Personal Care Company’s $1.37 billion acquisition of Harry’s, Inc., stating that a merger could eliminate the competition that drove down razor prices and spurred innovation.
As the industry was previously dominated by Procter & Gamble–Gillette and Venus–and Edgewell–Schick and Intuition/Hydro Silk–the complaint alleges the duopoly was characterized by annual price increases that were not driven by changes in costs or demand.
The FTC has issued an administrative complaint and authorized the filing of a complaint requesting a temporary restraining order and a preliminary injunction in the U.S. District Court for the District of Columbia to maintain the status quo pending an administrative trial on the merits.
Harry’s, which initially launched as an Internet-only, direct-to-consumer wet shave brand, entered into brick-and-mortar retail stores in 2016. As a result of the competitive threat, Procter & Gamble and Edgewell reduced prices and developed previously unavailable value-priced products, which generated significant benefits for consumers.
As the complaint alleges, by bringing the disruptive Harry’s under Edgewell’s control the proposed acquisition would eliminate important/growing competition among suppliers of wet shave razors, as well as inflict significant harm on U.S. consumers of razors.
The Commission vote to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction was 5-0. The administrative trial is scheduled to begin on June 30, 2020.
“Harry’s is a uniquely disruptive competitor in the wet shave market, and it has forced its rivals to offer lower prices, and more options, to consumers across the country,” said Daniel Francis, deputy director of the FTC’s Bureau of Competition. “The Harry’s and Flamingo brands represent a significant and growing competitive threat to the two firms that have dominated the wet shaving market for decades. Edgewell’s effort to short-circuit competition by buying up its newer rival promises serious harm to consumers.”
