FTC sues 1-800 Contacts over online search advertising

WASHINGTON (Reuters) - U.S. antitrust enforcers filed a complaint against 1-800 Contacts on Monday, alleging that the online contact lens seller reached agreements with 14 rivals which would hamper consumers seeking to compare prices.

The Federal Trade Commission alleged in an administrative complaint that 1-800 Contacts had reached agreements with 14 other online contact lens retailers that they would not advertise to customers who had searched online for 1-800 Contacts.

1-800 Contact agreed, for its part, to not advertise to customers who searched for its rivals, whose names were redacted from the complaint.

“1-800 Contacts has aggressively policed the bidding agreements, complaining to competitors when the company has suspected a violation, threatening further litigation, and demanding compliance,” the complaint said.

The retailer is the world’s largest contact lens store, according to its website, which touted total sales to more than 8 million customers.

Cindy Williams, the general counsel for 1-800 Contacts, said in a statement that the company would “vigorously defend” itself. “1-800 Contacts strongly believes in a competitive contact lens marketplace,” Williams added in an emailed statement.

In a twist, the company had been pressing the FTC to enforce rules that require optometrists to give patients their prescriptions so they can compare prices.

The FTC action was not filed in district court but to its own administrative court.

Reporting by Diane Bartz and Eric Walsh; editing by Bernard Orr and Alan Crosby