W.L. Gore facing legal scrutiny on two continents for unfair trade practices

Allegations that W.L. Gore, manufacturers of Gore-Tex, has and continues to limit fair trade and competition are being leveled against the company on two continents – North America and Europe. SNEWS is the first to report this story and has the inside information.
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Allegations that W.L. Gore, manufacturers of Gore-Tex, has and continues to limit fair trade and competition are being leveled against the company on two continents – North America and Europe.

SNEWS® has been watching Federal Trade Commission proceedings since we were alerted that an FTC investigation into W.L. Gore’s activities had been launched in late 2010, although little has occurred in the case until a March 2011 subpoena was issued as part of the FTC investigation. That investigation is seeking to determine whether W.L. Gore has engaged in unfair methods of competition “by contracts, exclusionary practices, or other conduct relating to waterproof or waterproof and breathable membranes or technologies and related products.”

The March 10 subpoena requested various business documents from W.L. Gore, and the attorney for the company on April 19 petitioned to limit or quash the request. However, the petition by Gore was denied on May 23 by the FTC, and W.L. Gore was instructed to provide all documents demanded in the subpoena by June 7, 2011.

Government scrutiny into Gore’s alleged anti-competitive practices aren’t limited to U.S. shores: SNEWS learned early on June 13 that Columbia and its brand OutDry had filed a complaint in late 2010 with the European Union, accusing W.L. Gore of violating EU anti-competition laws covering waterproof/breathable membranes in footwear and gloves.

Backroom whispering about Gore-Tex’s alleged bullying and anti-competitive behavior have been aired at trade shows for the last decade as manufacturers and suppliers jockeyed for the next fabric innovation. Long before Columbia’s acquisition of the OutDry brand in August 2010, OutDry representatives sent an email in March 2009 to SNEWS asking why meetings set up with companies during 2009 Outdoor Retailer Winter Market to be held at ispo a few weeks later were all suddenly cancelled -- seemingly without reason. OutDry inferred in the email that it was similar to an incident in 2003 when Lowe Alpine suddenly backed away from Event, and aligned itself with Gore even after a huge unveiling at an Outdoor Retailer show of its Event partnership (Click here to read our story). OutDry alleged in its March email its 2009 ispo meetings were cancelled because it believed companies received pressure from Gore not to meet with them.

When SNEWS asked officials at several companies for comment regarding the investigation by the FTC of W.L. Gore, most, including Polartec, declined. G.E., however, released the following to SNEWS by email: “G.E. is aware from public information that the FTC is looking at certain competitive practices of W.L. Gore in the area of waterproof/breathable fabrics. We don’t have further comment.”

Gore officials have steadfastly and repeatedly denied any implication of anti-competitive impropriety when they were questioned by SNEWS since the whispers alleging contract strong-arming have gotten louder since 2007. But for this story, an associate said the company was confident in its case.

Michael Ratchford, W.L. Gore government relations associate, told us, “While we don’t ordinarily comment regarding government and legal matters that are still in process, we can say that we have and continue to fully cooperate with the FTC requests for documents and other information. And we are very confident that as the FTC learns about Gore’s business practices, they will conclude that these practices are in compliance with anti-trust laws.”

It is worth noting that while many companies over the last three years have been more than eager to talk about allegations off-the-record, none has ever been willing to state a case on-the-record to provide support for any allegations of anti-competitive behavior by Gore.

But that reluctance to speak out could change as companies are perhaps emboldened by the now public stance by Columbia.

“Columbia and OutDry Technologies have long been concerned that W. L. Gore & Associates’ commercial practices systematically prevent consumers, brand owners and manufacturers from gaining access to competing product innovations in waterproof breathable footwear and gloves,” Peter Bragdon, Columbia’s senior vice president of legal and corporate affairs told SNEWS.

“We believe,” he continued, “W.L. Gore’s exclusionary conduct has deprived outdoor enthusiasts across the European Union, the United States and other regions throughout the world from learning about, experiencing and benefiting from new and innovative products.”

--Michael Hodgson

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