The nation’s largest online retailer of contact lenses, known as 1-800 Contacts, has unlawfully entered into a series of anticompetitive agreements with rival online contact lens sellers according to the Federal Trade Commission.
Federal Trade Commission chairman, Joseph J. Simons, ruled that the agreements between the online retailer and fourteen other online sellers of contact lenses establishes a base for unfair methods of competition which violates Section 5 of the FTC Act. The basic consumer protection statute enforced by the Commission in Section 5 provides that “unfair or deceptive acts or practices in or affecting commerce…are…declared unlawful.”
The agreements between 1-800 Contacts and company prevent online contact lens sellers from bidding for search engine result ads that would inform consumers that identical products are available at lower market prices. This harms competition in bidding for search engine key words, artificially reducing prices of 1-800 Contacts merchandise, as well as diluting the overall quality of search engine results provided to consumers in the contact lenses market. Furthermore, while this issue pertains to contact lenses, the general tainting of online advertising carries broader implications.
