For Release:
March 29, 2004
FTC: E-commerce Increases
Choice and Convenience for Contact Lens Wearers
The Federal Trade Commission today released
a staff report concluding that e-commerce offers consumers
greater choices and more convenience in the contact lens market.
This staff report is part of a series of reports that examine
possible anticompetitive barriers to e-commerce in a variety
of industries. “In contact lenses and other industries,
barriers to e-commerce can deprive consumers of the benefits
of increased competition,” said Timothy J. Muris, Chairman
of the FTC.
Agency Supports Competition in Contact Lens Industry
Sales of contact lenses in the U.S. are
well over $1 billion per year. Nearly 36 million Americans
– approximately 13 percent – wear contact lenses.
There are numerous contact lens manufacturers and many different
channels of distribution, including eye care practitioners,
national and regional optical chains, mass merchants, and
mail order and Internet firms.
In the past, contact lenses were designed
to be replaced infrequently and consumers generally purchased
lenses from their eye care providers. The advent of disposable
soft contact lenses – which consumers wear for a few
weeks and throw away – followed by the growth of non-practitioner
lens sellers, such as Internet-based contact lens retailers,
have changed the market dynamics. Although eye care providers
still control the prescription process, consumers now not
only purchase more lenses with greater frequency, but they
also have a greater choice of lens suppliers and modes of
delivery. The report states that non-traditional contact lens
sellers, such as Internet providers, represent a unique alternative
distribution channel and offer some consumers a combination
of price and convenience that they value highly.
The Commission has a long history of activity
in the eye care industry through law enforcement, advocacy
before other government agencies, and rulemaking. The FTC
has filed comments with state legislatures and licensing boards
addressing proposals that could reduce choice or increase
costs for consumers. It also promulgated the Ophthalmic Practices
Rule that requires optometrists and ophthalmologists to provide
patients with a copy of their eyeglass prescription after
completion of an eye exam at no extra cost.
Congress recently enacted the Fairness
to Contact Lens Consumers Act, which requires 1) that eye
care providers give patients a copy of their contact lens
prescriptions at the completion of a contact lens fitting;
and 2) that contact lens sellers either obtain a copy of the
prescription or verify the prescription information with the
prescriber before selling contact lenses to consumers. The
Commission is currently seeking comment on a proposed “Contact
Lens Rule” to implement the Fairness to Contact Lens
Consumers Act.
“Congress passed the Act
to enhance consumer choice and competition among contact
lens sellers, thereby benefitting consumers” said
Todd J. Zywicki, Director of the Office of Policy Planning.
“It is an excellent example of how Congress can act
to overcome barriers to interstate e-commerce that may restrict
competition to the detriment of consumers, while also preserving
valuable consumer protections.”
Key Findings and Recommendations
After extensive analysis, the FTC staff
report reached the following conclusions regarding online
contact lens sales:
- Although there are significant health
issues concerning the use and sale of contact lenses, requiring
a professional license to sell replacement contact lenses
over the Internet is likely to raise prices and/or reduce
convenience to consumers without substantially increasing
health protections already provided by existing prescription
requirements and general consumer protection laws. Staff
therefore recommends that policymakers rescind, or refrain
from adopting, requirements that an Internet seller have
a professional license to sell replacement contact lenses.
If states find it necessary to regulate replacement lens
sellers further, they should consider adopting simple registration
requirements.
- The release of contact lens prescriptions
by eye care providers facilitates consumer choice among
replacement contact lens suppliers, and greater consumer
choice increases consumer welfare. Likewise, adherence to
the prescription requirement is important to consumer health.
Consumers are more likely to adhere to recommended replacement
schedules if lenses are less expensive and more conveniently
available, however. Enforcement of prescription release
and verification requirements will help ensure that both
consumers’ health and economic interests are protected.
- Private label lenses and short prescription
lengths can promote consumer health and welfare but can
also limit consumer choice. Enforcing statutory provisions
regarding private label lenses and prescription length will
help ensure that contact lens seller and prescriber practices
generally promote consumer health and welfare and do not
hamper consumer choice in a way that ultimately harms consumers.
The FTC’s E-Commerce Initiative
This report continues the FTC’s efforts
to promote competition over the Internet. In August 2001,
Chairman Muris convened the Internet Task Force to evaluate
government regulations and business practices that could impede
online competition. The Task Force found that many state regulations
favor local suppliers over out-of-state competitors, and that
others ban online competition altogether for particular goods
or services.
In October 2002, R. Ted Cruz, then-Director
of the Office of Policy Planning, testified before the Subcommittee
on Commerce, Trade, and Consumer Protection of the House Committee
on Energy and Commerce regarding possible barriers to e-commerce
and focused on restrictions to internet commerce in auctions,
contact lenses, and wine. That same month, the Task Force
conducted a workshop to study possible anticompetitive barriers
to e-commerce in ten industries, including the contact lens
industry. At the workshop, FTC staff heard testimony from
all sides of the issue, including online sellers, brick-and-mortar
companies, state officials, academics, and consumer groups.
In July 2003, the Task Force released a report on anticompetitive
barriers to e-commerce in wine sales. In October 2003, Todd
J. Zywicki, current Director of the Office of Policy Planning,
testified before the Subcommittee on Commerce, Trade, and
Consumer Protection that states could significantly enhance
consumer welfare by allowing the direct shipment of wine.
The Internet Task Force will release a final report on the
workshop’s complete findings later this year.
Besides examining state regulatory barriers
to e-commerce at the workshop, FTC staff has encouraged pro-competitive
state regulation in other ways. For example, in Connecticut,
FTC staff filed comments with the state’s Board of Examiners
for Opticians that argued against regulations that would have
made it more difficult for online vendors to sell contact
lenses to consumers (these comments are included as an appendix
in the current report). In Oklahoma, FTC staff filed an amicus
brief opposing barriers to online sales of caskets. Similarly,
FTC staff with the Department of Justice filed joint comments
in a number of states and with the American Bar Association
to discourage the adoption of definitions of the practice
of law that could raise barriers to providing services online.
The Commission vote authorizing
staff to release the report was 5-0.
NOTE: The findings expressed
in the report are those of the staff of the FTC’s Office
of Policy Planning, Bureau of Consumer Protection, Bureau
of Competition, and Bureau of Economics and do not necessarily
represent those of the Commission or any individual Commissioner.
Copies
of the report are available from the FTC’s Web site
at http://www.ftc.gov
and also from the FTC’s Consumer Response Center, Room
130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
The FTC’s Bureau of Competition seeks to prevent business
practices that restrain competition. The Bureau carries out
its mission by investigating alleged law violations and, when
appropriate, recommending that the Commission take formal
enforcement action. To notify the Bureau concerning particular
business practices, call or write the Office of Policy and
Evaluation, Room 394, Bureau of Competition, Federal Trade
Commission, 600 Pennsylvania Ave., N.W., Washington, D.C.
20580, Electronic Mail: antitrust@ftc.gov;
Telephone (202) 326-3300. For more information on the laws
that the Bureau enforces, the Commission has published Promoting
Competition, Protecting Consumers: A Plain English Guide to
Antitrust Laws, which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.
MEDIA CONTACT:
Jen Schwartzman
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Maureen Ohlhausen
Deputy Director, Office of Policy Planning
202-326-2632
(http://www.ftc.gov/opa/2004/03/clrreport.htm)
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Related Documents:
Possible Anticompetitive Barriers
to E-Commerce: Contact Lenses: A Report from the Staff of
the Federal Trade Commission
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