|Dentsply Monopoly: A Test of Antitrust Law's Teeth|
|Subject||Monopoly; comparisons with perfect competition; antitrust law|
|Topic||Monopoly, Market Failure, Regulation and Public Choice|
|Key Words||Antitrust law, exclusive dealing, Justice Department, price|
Dentsply International, Inc. is a dental supply company that produces artificial teeth, among other products. The Justice Department alleges that it has violated federal antitrust law through its exclusive-dealing arrangements with authorized dealers who sell its products. According to Dentsply's criteria for independent dealers, they are prevented from selling other brands of false teeth. The justification is that the effective promotion of Trubyte teeth requires no competing products be offered. One dealer tried to sell multiple brands, but Dentsply stopped supplying him with Trubyte; when other dealers sold him some of their stock, Dentsply is alleged to have threatened to cut them off also. The need of dealers to sell the dominant brand forces them to take Dentsply's threats seriously.
Dentsply began in 1899 as the Dentists Supply Co. of New York, but grew through acquisitions, marketing, the support of dental schools, and strong management. It now supplies 70 percent of artificial teeth in the U.S.
The Justice Department estimates that terminating the alleged exclusive
dealing arrangements would reduce the price of artificial teeth by 5 to
20 percent. The price of dentures would not fall as much because the teeth
are only part of a set of dentures.
(Updated October 10, 2002)
|Source||Pamela Sebastian Ridge, "Big Tooth? Suit Says Dentsply Has a Monopoly," The Wall Street Journal, April 12, 2002.|
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