FTC Alleges Online Contact Lens Retailer Suppressed Online Search Ad Auctions

commission said in a Monday news release. Commissioners voted 3-0 to approve the administrative complaint; a trial is scheduled to begin April 11. The FTC said Google and Bing sell ad space on their search engine results pages through computerized auctions. The commission alleged 1-800 Contacts "secured agreements" between 2004 and 2013 with at least 14 competitors to not bid against each other in certain auctions. The agreements stem from lawsuits that 1-800 Contacts brought against rivals for supposedly infringing on its trademarks, said the FTC. The commission said such agreements are "overbroad" and aren't needed to safeguard legitimate trademark interests. "These bidding agreements unreasonably restrain both price competition in search advertising auctions and the availability of truthful, non-misleading advertising," said the complaint, adding that such agreements violate Section 5 of the FTC Act for unfair competition. The agency said the alleged practice deprived customers "of the benefits of vigorous price and service competition," increasing their search costs. In an emailed statement, 1-800 Contacts General Counsel Cindy Williams said the company "strongly disagrees" with the FTC's contention that the agreements were designed to protect its trademark and hinder competition. "1-800 Contacts is confident in its legal position and will vigorously defend its intellectual property rights in response to the administrative complaint filed today by the FTC," she said. Williams said the company has a "long history" of promoting competition and consumer rights, "including championing the passage of the landmark Fairness to Contact Lens Consumers Act of 2003 that increased convenience and lowered prices for consumers, and opposing recent price fixing by manufacturers."