Following FTC Decision, 1-800 Contacts Plans Appeal and Asserts Trademark Agreements Are ‘Lawful’

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WASHINGTON—Online contact lens retailer 1-800 Contacts is appealing a decision a Federal Trade Commission  (FTC) judge announced Monday regarding 1-800’s trademarks and related search advertising arrangements with competitors. The FTC judge, in a ruling that upheld FTC’s 2016 complaint against 1-800 Contacts, said the search advertising deals with competitors were anti-competitive.

As VMail reported, the FTC sued 1-800 Contacts in August 2016, alleging that it “unlawfully orchestrated … 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.”

According to the FTC complaint in 2016, 14 online contact lens retailers agreed to limit advertising to consumers who searched online for wording that included the 1-800 Contacts name.

In response to the FTC chief administrative law judge’s ruling on Monday, 1-800 Contacts general counsel Cindy Williams said in a statement that the company is disappointed about the ruling in the matter, which it says centers upon the right to trademark protection. “Nothing in the initial ruling, however, changes our view that the settlement agreements are lawful and procompetitive and that the company will ultimately prevail once the administrative process runs its course. Numerous court decisions involving similar issues are in direct conflict with this initial ruling and we expect any court that examines the facts will agree with our position.”

She also noted that 1-800 Contacts filed its appeal to the full FTC commission, “which stays all aspects of the judge’s proposed initial order.”

Williams added, “Consumers were not harmed by the trademark settlement agreements. The FTC staff presented no evidence of actual harm to support its claim. The administrative law judge did not cite, nor are we aware of, any facts to show that contact lens consumers paid higher prices for their contact lenses as a result of the trademark settlement agreements.”