Collusion is a tempting strategy. It is like a game of
corporate keep away, where companies band together to improve their own
conditions in the market, while keeping others out of their potential
successes. Over the years, Medtronic has been accused of engaging in this
illegal behavior for the sake of profits.
In the last few years, Medtronic has been accused of
colluding with several competitors to reduce the competition in the market. In
2012, “Senate Finance Committee Chairman Max Baucus (D-Mont.) and senior member
Chuck Grassley (R-Iowa)” accused Medtronic of collusion by falsifying product
reviews. They suggested that Medtronic had influence over the physicians that
were performing reviews of products and that the physicians were exaggerating
side effects of competing products to enhance the attractiveness of Medtronic
products. Evidence found that Medtronic paid $210 million in kickbacks to
physicians and that several email chains confirming the relationship between
Medtronic and the physicians. In 2014, “Stryker Corp. [asserted] anti-trust
claims against Medtronic over its sale of some 500 patents for its Kyphon
vertebroplasty technology to alleged patent troll Orthophoenix.” This example
is of explicit collusion, where one company is in direct communication with
another company to corner the market on a product. Also in 2014, Lenox MacLaren
Surgical Corporation blamed Medtronic for collusion through recalling Lenox’s
product and then charging super competitive prices for the same product, after
taking Lenox out of the market. In this case, Medtronic was not held
responsible for the accusation, but if it were, they would have been guilty of
reducing the competition in the market in order to keep prices high.
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