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FTC sues 1-800 CONTACTS for anticompetitive agreements
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The Federal Trade Commission has sued 1-800 CONTACTS, “alleging that it unlawfully orchestrated and now maintains a web of anticompetitive agreements with rival online contact lens sellers that suppress competition in certain online search advertising auctions,” the FTC announced in a press release.
The commission said these agreements also “restrict truthful and non-misleading Internet advertising to consumers, resulting in some consumers paying higher retail prices for contact lenses.”
The FTC’s administrative complaint states that 1-800 CONTACTS “entered into bidding agreements with at least 14 competing online contact lens retailers that eliminate competition in auctions to place advertisements on the search results page generated by online search engines such as Google and Bing.”
The FTC explained that 1-800 CONTACTS brought or threatened lawsuits against numerous rivals, accusing them of infringing trademarks, because 1-800 objected to a competitor’s advertisement appearing along with one from 1-800 CONTACTS when a user entered a search query that included the term “1-800 CONTACTS.”
“In almost all cases, 1-800 CONTACTS’ rivals agreed to sign the anticompetitive agreements to cease bidding,” the FTC stated in its press release.
The bidding agreements are “overly broad,” the FTC said, and unnecessary for safeguarding a legitimate trademark interest.
The American Optometric Association commended the FTC for filing this suit, according to a statement provided to Primary Care Optometry News.
“The AOA has been a long-time advocate against the abusive and illegal practices Internet contact lens sellers use, especially those that can lead to patient harm and result in added health care costs,” AOA President Andrea P. Thau, OD, said. “AOA and our [Coalition for Patient Vision Care Safety] partners will continue to fight against these retailers and hold sellers accountable, including supporting the Contact Lens Consumer Health Protection Act (S.2777), which aims to strengthen the patient health safeguards in existing federal law that have been undermined and, in certain cases, even ignored.”
The administrative trial is scheduled to begin April 17, 2017, according to the FTC. – by Nancy Hemphill, ELS, FAAO