November 14, 2018 / 9:13 PM / 6 months ago

FTC orders 1-800 Contacts to end search restriction deals with rivals

WASHINGTON (Reuters) - The Federal Trade Commission and 1-800 Contacts appeared headed to court on Wednesday as the agency ordered the retailer to end all agreements with rivals that hamper online price-shopping, and 1-800 Contacts said it would appeal.

The FTC issued the order following a decision by an internal FTC judge in October 2017 that 1-800 Contacts had improperly hammered out deals with rivals that restricted search advertising.

1-800 Contacts said in a statement that it disagreed with the decision and would appeal.

The FTC had accused the company in August 2016 of reaching agreements with 14 other sellers that required them to refrain from advertising to consumers who had searched online for 1-800 Contacts. In exchange, 1-800 Contacts agreed not to advertise to individuals who searched for the names of rivals.

The FTC ordered 1-800 Contacts to stop “enforcing the unlawful provisions in its existing agreements and from entering into similar agreements in the future” in an opinion that was authored by Chairman Joseph Simons, a Republican.

The company said the deals that it had struck with rivals were aimed at protecting investments made in establishing its trademark.

“We will appeal this ruling in court and are confident that our right to protect our trademarks will be upheld,” General Counsel Roy Montclair said in a statement.

The company has about 50 percent of the market for internet sales of contact lenses, according to the FTC complaint filed in the case. AEA Investors LP is an investor in the company.

Reporting by Diane Bartz; Editing by Jeffrey Benkoe and Dan Grebler

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