$7M Settlement Resolves 1-800 Contacts Antitrust Class Action

1-800 Contacts has agreed to pay $7 million to end a class action alleging the company conspired with other retailers to hike the prices of online contacts.

Lead plaintiffs, J. Thompson and William Duncanson, alleged in their class action lawsuit that the online contact retailer and other retailers agreed to a price-fixing scheme for direct to consumer online ads.

Under the terms of the settlement, two retailers, Arlington Contact Lens Service Inc. and National Vision Inc., have agreed to assist consumers who were victims of the price-fixing.

According to the class action, 1-800 Contacts forced the CEO of one of the retailers to enter into a price-fixing agreement by threatening legal action for trademark infringement.

“It is now apparent that 1-­800 Contacts entered into similar agreements with other e­commerce competitors in the online sale of contact lenses,” said the CEO in court documents. “AC Lens currently believes that these settlement agreements likely prevented consumers from seeing ads for companies, including AC Lens, that typically sold contact lenses online for prices below the prices charged by 1­-800 Contacts. These agreements also likely enabled 1­-800 Contacts to charge prices higher than it would have been able to charge absent the agreements.”

The class action alleges that 1-800 Contacts forced dozens of other online retailers to enter into online advertising agreements that removed them from search results. This caused consumers to only see what 1-800 Contacts charged for lenses and removed the competition. The class action alleges that this drove prices up and harmed consumers.

The settlement Class will include “[A]ll persons in the United States who made at least one online purchase of contact lenses from 1-800 Contacts, Inc., Arlington Contact Lens Service, Inc., or National Vision, Inc. from March 10, 2010 through September 19, 2017, who do not timely exclude themselves from the Class,” according to court documents.

1-800 Contacts will provide the names and addresses of individuals who purchased contact lenses online during the class period.

This class action was initiated after the Federal Trade Commission sued 1-800 Contacts for allegedly entering into a number of bidding contracts that effectively removed all competition for online advertising.

According to court documents, Class Members will be provided with significant financial compensation under the settlement agreement.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

Thompson and Duncanson 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.

The 1-800 Contacts Anti-Competitive Online Advertising Scheme Class Action Lawsuit is J Thompson and William P. Duncanson 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: On July 5, 2019, Luxottica reached a settlement with customers, extracting itself from a class action lawsuit alleging that 1-800 Contacts and other companies colluded to reduce competition in the contact lens market.

UPDATE 2: On Sept. 17, 2019, Walgreens and Vision Direct agreed to settle antitrust class action claims against them, leaving 1-800 Contacts as the only remaining defendant in the litigation.

UPDATE 3: July 2020, the 1-800 Contacts class action settlement is now open. Click here to file a claim.