Cochlear rejects ACCC arguments on proposed takeover

Hearing implant manufacturer Cochlear has rejected competition concerns raised by the Australian Competition and Consumer Commission (ACCC) over its proposed acquisition of Oticon Medical.

The ACC said in a statement that the proposed takeover of non-surgical bone conductive hearing device manufacturer Oticon raised ‘preliminary competition concerns’ due to there being few global manufacturers of such devices.

Cochlear is best known for its hearing implants which are surgically implanted and stimulate the cochlear nerve, however it also makes what are essentially hearing aids that transmit sound to the nerve through the skull.

ACCC Chair Gina Cass Gottlieb said: “Cochlear is by far the largest supplier of surgical bone anchored devices and cochlear implants in Australia. It is also an important supplier of non-surgical bone conduction devices.

“Although Oticon Medical has a much smaller presence in Australia, we have significant concerns that the proposed acquisition will remove one of Cochlear’s few competitors in the supply of these three types of hearing devices in Australia.

“These devices are critically important in providing choice to consumers with hearing loss about the way they manage their hearing needs.”

She said the ACCC was concerned the proposed acquisition would substantially lessen competition in already highly concentrated markets, which may lead to higher prices, reduced service levels and reduced innovation.

“Market feedback has indicated that demand for these devices is likely to increase and so it is important to ensure acquisitions in this market do not lead to higher prices or reduced innovation over time.”

However Cochlear hit back this morning, acknowledging that the public consultation initiated by the regulator was an important part of the ACCC’s process for assessing such a transaction.

Cochlear said: “Cochlear does not believe the proposed acquisition will reduce competition and will continue to work with the ACCC to address matters raised as part of the public consultation process.”

The ACCC has advised a provisional final decision date of 16 March, 2023.

Picture: Cochlear/Baha SoundArc bone conduction device