US anti-aging player accused of anti-competitive practices
ZO Skin Health, founded by Dr Zein Obagi to market his new range of anti-ageing products, alleges that OMP (also founded by Dr Zein Obagi before he sold a controlling share to outside investors) is engaging in anti-competitive practices to stop ZO Skin Health from marketing its products.
The Beverly Hills-based company claimed, in a lawsuit filed on January 7 in the Superior Court of the State of California, County of Los Angeles, that OMP has been preventing distributors from the products.
Dr Obagi maintains that his new products, marketed under ZO Skin Health, do not directly compete with those of OMP because they are sold directly to the consumer, whereas OMP’s are physician prescribed.
The lawsuit claims that OMP was given the chance to distribute the ZO Skin Health range, but they declined. ZO Skin Health then began to search for alternative distributors – something that it claims OMP has unlawfully stopped it from doing.
According to the complaint, ZO Skin Health signed an agreement with one of the biggest skin care and e-commerce platforms securing the distribution of the line. OMP then instructed the e-commerce company that it was not allowed to sell ZO products because of a non-compete agreement between OMP and Dr Obagi, the lawsuit claimed.
The e-commerce platform has allegedly since refused to sell the line.
Dr Obagi maintains that this non-compete clause used by OMP is ‘void and against California public policy’ as well as being against the company’s corporate policy.
Furthermore, the lawsuit claims that OMP interfered with a potential buyout of ZO Skin Health by Japanese firm Rohto Pharmaceutical.
OMP acknowledged the filing of the lawsuit in a statement and said it was planning to ‘vigorously defend itself against these claims’.
No one from either company was available for comment at the time of publishing.