Walgreens Settles Contacts Price-Fixing Class Action

Walgreens and Vision Direct recently agreed to settle antitrust class action claims against them, leaving 1-800 Contacts as the only remaining defendant in the litigation.

In light of the settlement, U.S. Magistrate Judge Dustin B. Pead issued an order that will stay all deadlines for Walgreens and Vision Direct.

The details of the settlement are not currently available, but the motion for a stay notes that the settlement will include “monetary payment plus specified cooperation.”

Plaintiffs filed their antitrust class action lawsuit against 1-800 Contacts, Walgreens, Vision Direct, and other companies in October 2016. The plaintiffs alleged that the companies were involved in an antitrust scheme which suppressed competition and fixed the online prices of contact lenses.

1-800 Contacts was allegedly the “instigator and primary enforcer” of the antitrust scheme and reportedly began securing agreements with other companies as early in 2004. The company allegedly realized that its business was being undercut by competitors and pursued anti-competitive agreements as a solution. When pursuing the illegal agreements, 1-800 Contacts reportedly sent threatening letters to competitors claiming trademark infringement despite having no standing.

“1-800 Contacts abused its monopoly power and entered into bilateral agreements with each of its competitors/co-conspirators to not bid against each other in advertising auctions conducted by internet search engines,” the contact lens antitrust class action claimed.

As a result, companies like Walgreens and Vision Direct allegedly agreed to suppress competition and artificially fix the online price of contacts lenses.

The contact lens antitrust class action was prompted by a Federal Trade Commission (FTC) complaint against 1-800 Contacts claiming that the agreements gave the company unfair advantages in advertising. According to the FTC, the agreements allowed 1-800 Contacts to secure advertisements on Google and Bing without competition from other online contact lens companies.

After the settlement with Walgreens Boots Alliance Inc. and Vision Direct Inc., only 1-800 Contacts remains as a defendant in the antitrust class action lawsuit. In July 2019, Luxottica Retail North America Inc. agreed to pay $5.9 million to resolve the claims against them. In 2017, Arlington Contact Lens Service Inc. and National Vision Inc. agreed to settle their claims for $7 million.

In November 2018, a split decision from the FTC reportedly found that these practices were illegal due to competition suppression and consumer harm. As such, the commission ordered 1-800 Contacts to stop entering into these agreements and enforcing any current agreements.

Did you purchase contacts online from 1-800 Contacts or another retailer included in the alleged antitrust scheme? Share your experience in the comment section below.

Plaintiffs are represented by Carl E. Goldfarb, Scott E. Gant and Melissa Felder Zappala of Boies Schiller Flexner LLP, and David W. Mitchell, Brian O. O’Mara and Steven M. Jodlowski of Robbins Geller Rudman & Dowd LLP; and by Heather M. Sneddon and Jared Scott of Anderson & Karrenberg.

The Walgreens 1-800 Contacts Antitrust Class Action Lawsuit is Thompson, et al. v. 1-800 Contacts Inc., et al., Case No. 2:16-cv-01183, in the U.S. District Court for the District of Utah.

UPDATE: July 2020, the 1-800 Contacts class action settlement is now open. Click here to file a claim.

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