In a defeat for the Federal Trade Commission (FTC), a federal appeals court in New York on Thursday, August 26, rejected a request to reconsider its earlier decision to clear 1-800 Contacts of antitrust charges involving agreements to restrict search advertizing.
The 2nd Circuit Court of Appeals didn’t give a reason for denying the FTC’s request, reported MediaPost.
Unless the Supreme Court intervenes, the 2nd Circuit decision will remain on the books — and could well encourage other companies to sue competitors over search advertising tactics. An FTC spokesperson declined to comment Thursday on whether the agency will seek to appeal to the Supreme Court.
The legal dispute between the FTC and 1-800 Contacts stems from a series of lawsuits brought by the contact lens retailer between 2004 and 2013. During that time, the company sued (or threatened to sue) at least 14 competitors, on the theory that they infringed 1-800 Contacts’ trademark by using it to trigger paid search ads.
Thirteen of the companies settled with 1-800 Contacts by agreeing to restrict the use of its trademark in search advertising. In 2016, the FTC alleged in an administrative complaint that those deals violated antitrust law.
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