Business News

FTC suing 1-800 Contacts over alleged agreements with rivals that misled customers

The Federal Trade Commission is suing 1-800 Contacts, the largest online contact lenses retailer in the United States, over accusations the company reached agreements with competitors that misled customers.

The FTC accuses 1-800 Contacts of reaching bidding agreements with at least 14 competing online contact lens retailers in which 1-800 Contacts would not advertise to customers who searched for rival retailers, and vice versa.

1-800 Contacts is accused of “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 and that restrict truthful and non-misleading Internet advertising to consumers, resulting in some consumers paying higher retail prices for contact lenses,” the FTC said in a statement.

The bidding agreements “unreasonably restrain price competition” in Internet search engines such as Goggle and Bing, which constitutes “an unfair method of competition in violation of federal law,” the FTC writes.

The contact lens rivals 1-800 Contacts is accused of reaching bidding agreements with were not named. The FTC alleges 1-800 Contacts threatened some rivals with lawsuits, accusing them of infringing its trademarks, because the company “objected” when an Internet search that included the term “1-800 Contacts” would advertise both the company and its competition.

The trial is scheduled to begin on April 11.