WASHINGTON—The Federal Trade Commission this week issued its decision in an online search advertising dispute involving 1-800 Contacts, ruling that the online contact lens retailer “unlawfully entered into a web of anticompetitive agreements with rival online contact lens sellers,” according to an announcement earlier this week. In an opinion written by FTC chairman Joseph J. Simons, the agency ruled that the agreements between 1-800 Contacts and 14 other online contact lens retailers “constitute unfair methods of competition.”

The opinion also noted that the agreements “prevent online contact lens retailers from bidding for search engine result ads that would inform consumers that identical products are available at lower prices.” In addition, these agreements “harm competition in bidding for search engine key words, artificially reducing the prices that 1-800 Contacts pays, as well as the quality of search engine results delivered to consumers,” the FTC announcement noted.

The FTC ruling this week upholds chief administrative law judge D. Michael Chappell’s October 2017 initial decision in the matter, which VMAIL reported on. The FTC’s consideration of the issue began with an August 2016 administrative complaint.

Executives at 1-800 Contacts could not be reached for comment, but an attorney for the company told Media Post that 1-800 Contacts plans to appeal the decision. “We have the legal right to stop others from unlawfully using our trademarks that protect our brand name and from free-riding on our investment,” general counsel Roy Montclair said in a statement, according to the Media Post report. “The settlement agreements were a standard way to resolve such trademark claims and were not a means to hinder competition for contact lenses.”

The FTC said Utah-based 1-800 Contacts is “the nation’s largest online retailer of contact lenses.”

According to the FTC’s statement, its order requires 1-800 Contacts to end enforcement of “the unlawful provisions in its existing agreements and from entering into similar agreements in the future.” The order also prohibits 1-800 Contacts from agreeing with other contact lens retailers to restrict search advertising or to limit participation in search advertising auctions, according to the FTC announcement.

The commission voted 3-1-1 to approve the order, with commissioner Noah Joshua Phillips dissenting and commissioner Christine Wilson not participating. In her dissenting statement, commissioner Phillips said she “fear[s] the majority’s approach will foster uncertainty and undermine trademark policy,” among her objections to the ruling.

According to the FTC’s announcement, 1-800 Contacts may file a petition for review of the commission’s opinion and final order with a U.S. Circuit Court of Appeals within 60 days after service of the final order.