WASHINGTON (Legal Newsline) — The Federal Trade Commission
(FTC) has announced a lawsuit against 1-800 Contacts, charging the online retailer
of contact lenses with allegations of unlawfully orchestrating and maintaining
a web of anticompetitive agreements with rival companies.
The FTC alleges 1-800 Contacts entered into bidding
agreements with at least 14 competing companies. These bidding agreements
purportedly restrain price competition in Internet search auctions.
Additionally, they restrict truthful and non-misleading advertising to
consumers, according to the FTC.
This case stems from 1-800 Contacts' alleged decision to
threaten competing companies with lawsuits after learning that, when consumers
searched online for “1-800 Contacts,” they would then see advertisements for
both 1-800 Contacts and a competing seller. In almost all cases, these
competing companies agreed to sign the purportedly anti-competitive agreements.
These agreements usually forced the company to use negative keywords designed
to stop search engines from displaying their website when those search terms are
The FTC argues these agreements harm consumers by
restraining competition and reducing the number of relevant advertisements on
The FTC voted 3-0 to issue the administrative complaint.