Bosley Inc., the nation’s largest surgical hair restoration company, has agreed to a consent order settling a Federal Trade Commission (“FTC”) complaint alleging that the company exchanged competitively sensitive information with Hair Club Inc. before the two companies merged.

Bosley, a subsidiary of Aderans Co Ltd., performs hair loss treatments at 22 offices across the United States.  According to the FTC complaint, Bosley’s CEO discussed price floors and discounts, business expansions and operations, and future products with executives at Hair Club Inc. and other competitors for four years.

While the FTC did not find evidence of an explicit agreement between Bosley and Hair Club, Section 5 of the Federal Trade Commission Act authorizes the FTC to bring a complaint if it finds evidence of unfair and anticompetitive acts that could harm consumers.

“The information could facilitate coordination or endanger competition by reducing uncertainty about a rival’s product offerings, prices, and strategic plans.  For example, the information exchanges could lead a competitor to determine not to open facilities or market services in a particular location,” the FTC’s complaint analysis states.

Aderans, a Japanese company, purchased Hair Club Inc. for $163.5 million in July 2012.  The FTC found the anticompetitive communications while conducting investigations to determine whether or not to approve the acquisition.

As part of the agreement, Bosley and Aderans must immediately stop any communications of sensitive, nonpublic information with competitors.  The companies must also implement antitrust compliance programs requiring all employees to participate, including the highest level executives.  Bosley and Aderans will also submit compliance reports to the FTC when they make any corporate changes affecting competition.

The FTC will accept public comment on the consent agreement until May 8, 2013.  Members of the public can submit comments online or they can mail comments to Federal Trade Commission, Office of the Secretary, Room H-113, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.