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CRA Economists Help Church & Dwight Defeat Antitrust Lawsuit Launched By Mayer Laboratories And Close A FTC Investigation of Church & Dwight's Distribution Practices
September 11, 2012

Economists in the Antitrust & Competition Economics Practice at Charles River Associates assisted condom distributor Church & Dwight both with the dismissal of an antitrust lawsuit brought by a competing distributor, Mayer Laboratories, and with the closing of a Federal Trade Commission (FTC) investigation into those same practices.

In the lawsuit filed in February 2009, Mayer Laboratories alleged that certain shelf space agreements between Church & Dwight and retailers were anticompetitive under both the Sherman Act and California law; Mayer Laboratories claimed it experienced antitrust injury as a result of these allegedly exclusionary contracts because it was unable to obtain shelf space from these retailers. On March 1, 2012, the district court dismissed all of the antitrust claims against Church & Dwight Church & Dwight Co., Inc. v. Mayer Laboratories, Inc., 2012 WL 1231801 (N.D. Cal. April 12, 2012)

CRA economists were retained by counsel to Church & Dwight, DLA Piper, to analyze the alleged antitrust claims and provide various economic reports and analyses during the rebuttal process leading up to a trial. Senior Consultant to CRA, Professor Joshua Wright of the George Mason University Law School and a recognized authority on vertical contractual arrangements, analyzed both the efficiencies and the lack of any significant rival foreclosure arising from the disputed practices.  In addition, analyses prepared by CRA Vice President Serge Moresi, an expert in competition modeling dealing with strategic interactions among market participants, relied on a sophisticated economic model to illustrate why condom prices could fall using the kinds of practices adopted by Church & Dwight, even in the absence of efficiencies. Before the matter reached trial, the district court, relying extensively upon the analysis of Church & Dwight’s economic experts, dismissed all antitrust claims.

Concurrent with the private antitrust suit, the Federal Trade Commission (FTC) had begun reviewing the same contractual practices used by Church & Dwight to obtain shelf space at grocery, drug, and convenience stores and the effects of those practices on Church & Dwight’s competitors. Again, CRA economists assisted Church & Dwight in arguing to the FTC that Church & Dwight’s practices were not anticompetitive. On June 25, 2012, the FTC notified Church & Dwight in a letter that it was closing its investigation and indicated that no further action was warranted by the FTC. 

“We are pleased to have assisted with our client’s winning defense and the dismissal of all claims in the private suit and the closing of the FTC investigation,” said CRA's President and Chief Executive Officer Paul Maleh. “The economic and academic perspectives provided by our team helped to produce a positive result for our client.”

In addition to Professor Wright and Dr. Moresi, CRA’s team was led by Vice President John Woodbury, Principals Spencer GrafAnn McDermott, and Yianis Sarafidis, Senior Associate Adriana de la Huerta, and Consulting Associate Fumi Tamaki.