There’s stiff competition for a place in your bathroom, and it’s not just from the kids banging on the door every two minutes yelling “I have to go potty!” There’s a ton of companies hoping you’ll scrape their razor over your face every morning, and the Feds want to make sure it stays that way.
There are tons of companies who want to make the razor you scrape over your face every morning, and the Feds want to make sure it stays that way.
The Federal Trade Commission just filed a lawsuit against Edgewell Personal Care Company, which owns shaving brands Schick, Wilkinson Sword, Personna, Edge, Skintimate, and a collection of non-shaving brands like Playtex and Hawaiian Tropic. Edgewell recently proposed a $1.37 billion acquisition of Harry’s, the company that started as a direct-to-consumer razor brand that has since expanded to other men’s personal care products, added a women’s brand (Flamingo), and moved into physical retailers like Target and Walmart. The FTC’s suit is intended to block it.
“Harry’s is a uniquely disruptive competitor in the wet shave market, and it has forced its rivals to offer lower prices, and more options, to consumers across the country,” said Daniel Francis, Deputy Director of the FTC’s Bureau of Competition. “The Harry’s and Flamingo brands represent a significant and growing competitive threat to the two firms [Edgewell and Procter & Gamble] that have dominated the wet shaving market for decades. Edgewell’s effort to short-circuit competition by buying up its newer rival promises serious harm to consumers.”
The FTC has the discretion to let mergers and acquisitions that might potentially threaten competition through, and it’s often sat on the sidelines as industries have become dominated by dwindling numbers of firms. It’s even more reticent to break up massive companies like Google and Amazon that have grown to control huge chunks of their respective markets.
That’s why it’s kind of funny that it’s flexing its muscles for the razor industry, particularly when Unilever — owner — was allowed to purchase Dollar Shave Club, another wildly successful DTC startup, for $1 billion less than four years ago. It’s not quite apples to apples, but the optics are amusing to say the least.
And honestly, it’s kind of bleak that the FTC is using its power on this market instead of on much larger deals in industries like entertainment and e-commerce where fewer companies have more power than ever before and the exercise of that power can have broad consequences.
So while it is kind of amusing that this is what the Feds are choosing to focus on, the good mood is tempered by the fact that in many other industries, the lack of actions like these has led to situations that are decidedly unfriendly to consumers.