The U.S. Federal Trade Commission (FTC) is probing whether Abbott Laboratories (ABT.N) and other companies that make baby formula colluded in bidding on state contracts, according to a document posted on the agency’s website.
The FTC is looking into whether the companies “engaged in collusion or coordination with any other market participant regarding the bidding,” according to the document.
According to the document, in 2022 the FTC began looking into potential collusion or coordination in bids to provide formula for the U.S. Department of Agriculture’s Women, Infants and Children (WIC) program that provides free formula to low-income families.
The document said studies showed that in addition to the money made from the contracts, the contract win tended to lead to better commercial sales.
“Although the boost in non-WIC sales motivates manufacturers to win WIC contracts, it may also create incentives to engage in collusive or coordinated market allocation, whereby incumbent WIC contract holders agree not to bid against each other,” the document, written by Commissioner Alvaro Bedoya, said.
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