US: 1-800 Contacts want antitrust suit dismissed

Contact lens seller 1-800 Contacts has asked a Utah federal court to toss a proposed class suit alleging the companies conspired to limit competition for the online sale of contact lenses, saying the accusations came too late.

The class action complaint in question alleges that the company violated antitrust laws by preventing other companies from using its trademarks in search advertising.

On a motion filed on Friday, 1-800 Contacts argues that the consumers who filed suit have not presented enough facts to show that the alleged search advertising practices resulted in prices higher than a competitive market would bear. 1-800 Contacts also argues that the lawsuit was filed after the expiration of a four-year statute of limitations.

The suit follows a similar complaint lodged by the U.S. Federal Trade Commissionagainst 1-800 Contacts in August. The FTC’s complaint alleges that 1-800 Contacts was the driving force behind pacts made between online contacts sellers to prevent them from competing against one another in online search advertising auctions.

The agency argues that the agreements to restrict keyword advertising harmed search engines by distorting their ad auctions and reducing the quality of the search results. The FTC also says the agreements resulted in higher prices for consumers, arguing that 1-800 Contacts charges more than online rivals, but that consumers stop searching and order from 1-800 Contacts if it is the only advertiser in the search results.

The FTC action is still pending before an administrative law judge.

In its motion last week 1-800 Contacts said that the consumers’ lawsuit should be dismissed. The company contends that most of its settlement agreements occurred before August of 2012, putting them beyond the four-year statute of limitations for antitrust violations.

1-800 Contacts is represented by Rohit K. Singla, Justin P. Raphael and Ashley D. Kaplan of Munger Tolles & Olson LLP.

The case is Thompson et al. v. 1-800 Contacts Inc. et al., case number 2:16-cv-01183, in the U.S. District Court for the District of Utah.

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