[Federal Register Volume 69, Number 78 (Thursday, April 22, 2004)]
[Notices]
[Pages 21833-21836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9156]


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FEDERAL TRADE COMMISSION


Contact Lens Study

AGENCY: Federal Trade Commission.

ACTION: Notice and request for public comment.

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SUMMARY: In the Fairness to Contact Lens Consumers Act (``the Act''), 
15 U.S.C. 7601 et seq., which provides for the availability of contact 
lens prescriptions to patients and the verification of contact lens 
prescriptions by prescribers, Congress required the Federal Trade 
Commission (the ``Commission'' or ``FTC'') to conduct a study 
(``Contact Lens Study'' or the ``Study'') of the strength of 
competition in the sale of prescription contact lenses. In connection 
with preparation of the Study, the Commission is requesting public 
comment on several relevant issues.

DATES: Public comments must be received on or before June 24, 2004.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Contact Lens Study, Project No. V040010,'' 
to facilitate the organization of comments. A comment filed in paper 
form should include this reference both in the text and on the 
envelope, and should be mailed or delivered to the following address: 
Federal Trade Commission/Office of the Secretary, Room H-159 (Annex L), 
600 Pennsylvania Avenue, NW., Washington, DC 20580. Comments containing 
confidential material must be filed in paper form, as explained in the 
Supplementary Information section. The FTC is requesting that any 
comment filed in paper form be sent by courier or overnight service, if 
possible, because U.S. postal mail in the Washington area and at the 
Commission is subject to delay due to heightened security precautions. 
Comments filed in electronic form (except comments containing any 
confidential material)

[[Page 21834]]

should be sent to the following e-mail box: [email protected].
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at www.ftc.gov. As a matter of discretion, the FTC makes 
every effort to remove home contact information for individuals from 
the public comments it receives before placing those comments on the 
FTC Web site. More information, including routine uses permitted by the 
Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to Maureen Ohlhausen or James Cooper, Federal Trade 
Commission, Office of Policy Planning, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Telephone: 202-326-2632 (Maureen Ohlhausen) or 
202-326-3367 (James Cooper); e-mail: JC--[email protected] or 
MO--[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On December 6, 2003, President Bush signed the Fairness to Contact 
Lens Consumers Act (``the Act'').\1\ Among other things, the Act 
requires that prescribers--such as optometrists and ophthalmologists--
provide contact lens prescriptions to their patients upon the 
completion of a contact lens fitting.\2\ The Act also mandates that 
prescribers verify contact lens prescriptions to third-party contact 
lens sellers who are authorized by consumers to seek such 
verification.\3\ The Act directs the Commission to prescribe 
implementing rules.\4\
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    \1\ 15 U.S.C. 7601 et seq.; Pub. L. 108-164.
    \2\ Id. at 7601.
    \3\ Id. at 7061, 7603.
    \4\ Id. at 7607.
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    The Act also directs the Commission to conduct a study to examine 
the strength of competition in the sale of prescription contact lenses, 
including an examination of several specified issues.\5\ The Commission 
today solicits public comments on these issues, as set forth in section 
II below.
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    \5\ Id. at 7609.
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II. Request for Public Comments

    In the Act, Congress directed the Commission to undertake a study 
examining the following issues related to the strength of competition 
in the sale of prescription contact lenses: (1) The incidence of 
exclusive relationships between prescribers or sellers and contact lens 
manufacturers and the impact of such relationships on competition; (2) 
The difference between online and offline sellers of contact lenses, 
including price, access, and availability; (3) The incidence, if any, 
of contact lens prescriptions that specify brand name or custom labeled 
contact lenses, the reasons for the incidence, and the effect on 
consumers and competition; (4) The impact of the Federal Trade 
Commission Eyeglass Rule (16 CFR Part 456 et seq.) on competition, the 
nature of enforcement of the rule, and how such enforcement has 
impacted competition; and (5) Any other issue that has an impact on 
competition in the sale of prescription contact lenses.\6\
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    \6\ Id.
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    In connection with the Contact Lens Study, the Commission 
particularly is interested in receiving comment on the questions that 
follow. These questions are designed to assist the public and should 
not be construed as a limitation on the issues on which public comment 
may be submitted. Responses to these questions should cite the numbers 
and subsection of the questions being answered. For all comments 
submitted, please submit any relevant data, statistics, or any other 
evidence upon which those comments are based.
    With regard to the following questions: (1) Prescribers include eye 
care practitioners (i.e., ophthalmologists, optometrists, or other 
persons permitted under state law to issue prescriptions for contact 
lenses) that sell contact lenses, as well as optical chains and other 
retailers that offer eye care practitioner services and sell contact 
lenses; (2) sellers include bricks-and-mortar retailers, as well as 
mail order and Internet firms that sell contact lenses, but do not 
offer any eye care practitioner services.

Exclusive Relationships

    1. Please comment on the incidence of exclusive manufacturer-
prescriber and manufacturer-seller relationships: (a) How common is it 
for a contact lens manufacturer to sell only to prescribers, to the 
exclusion of sellers? (b) How common is it for a contact lens 
manufacturer to sell only to sellers, to the exclusion of prescribers? 
(c) If a contact lens manufacturer sells only to prescribers or 
sellers, what type of limitations and restrictions on re-sale typically 
are found in such agreements? (d) How common is it for prescribers to 
agree to prescribe only certain manufacturers' contact lenses? (e) Do 
the manufacturers that are parties to agreements in question (d) 
restrict the sales they make to sellers and prescribers that are not 
parties to the type of agreements in (d)?
    2. Please comment on whether contact lens prescribers advertise 
their willingness to provide prescriptions for contact lenses available 
from competing prescribers and sellers: (a) How prevalent is prescriber 
advertisement of willingness to prescribe contact lenses available 
through other prescribers and sellers? (b) How prevalent is consumer 
awareness of prescribers' willingness to prescribe contact lenses 
available from alternative prescribers and sellers? (c) Are consumers 
able to shop for prescribers that will prescribe contact lenses 
available from alternative prescribers and sellers? (d) What role do 
state regulatory or self-regulatory bodies play in controlling 
prescriber advertisements, especially with respect to a prescriber's 
willingness to prescribe contact lenses that are available from 
alternative prescribers and sellers? (e) Do manufacturers advertise 
directly to consumers that their contact lenses are available both from 
sellers and prescribers? (f) Do sellers advertise that lenses may be 
purchased from sellers that are not prescribers?
    3. Are there instances where exclusive relationships have prevented 
market entry by a manufacturer, seller, or prescriber?
    4. Please comment on the market shares of prescribers, sellers, and 
manufacturers: (a) What are the national and local market shares of 
contact lens manufacturers? (b) What are the national and local market 
shares of sellers? (c) What are the local market shares of contact lens 
sales by prescribers? (d) Are there instances where a specific 
prescriber (including different eye care practitioners associated with 
the same chain or retailer) issues a substantial share of contact lens 
prescriptions at a local level?
    5. Please comment on the benefits, if any, associated with 
exclusive manufacturer-prescriber and manufacturer-seller 
relationships: (a) To what extent do exclusive relationships lower 
costs for manufacturers and/or for sellers and prescribers, and to what 
extent are these cost savings passed on to consumers? (b) What role do 
exclusive relationships play in assuring

[[Page 21835]]

that sellers or prescribers give a manufacturer's contact lenses the 
desired level of promotion? (c) What role do exclusive relationships 
play in assuring that sellers or prescribers provide customers with the 
level of service that manufacturers desire to accompany their contact 
lenses? (d) What role do exclusive relationships play in discouraging 
sellers and prescribers from ``free-riding'' off the promotional or 
customer service efforts provided by other sellers or prescribers?
    6. Please comment on how, if at all, current patterns of exclusive 
relationships may change in response to the Act.
    7. Please provide any other information regarding the impact of the 
exclusive relationships on competition.

Online and Offline Sellers

    8. Are there differences in the prices charged for similar contacts 
lenses by online and offline merchants?
    9. Are there any cost advantages associated with selling contact 
lenses online versus offline?
    10. Please comment whether consumers find it more convenient to 
purchase contact lenses online or offline: (a) Do consumers save time 
by purchasing their contacts online rather than at an offline store, or 
vice-versa? (b) What is the value consumers place on any time savings? 
(c) Do consumers find greater lens availability online or offline? (d) 
Irrespective of any time savings, do consumers find it more convenient 
to purchase contact lenses online rather than at an offline store, or 
vice-versa? (e) Do consumers who purchase contact lenses from online 
sellers differ from consumers who purchase from bricks-and-mortar 
sellers and prescribers with regard to income, education, geographic 
location, or any other attribute? (f) What is the cost to consumers of 
home delivery of contact lenses?
    11. Do consumers who purchase contact lenses from offline sellers 
have any differing concerns with regard to the quality of the lenses 
they receive from those who purchase contact lenses online?
    12. Please comment on the extent to which online and offline 
contact lens sellers compete: (a) To what extent are offline contact 
lens sellers' pricing decisions affected by prices offered by online 
sellers? (b) To what extent are online contact lens sellers' pricing 
decisions affected by prices offered by offline sellers? (c) To what 
extent do prices charged for identical contact lenses vary among online 
sellers, and is the variance any greater or smaller than that found 
between prices offered by offline sellers? (d) Are some online sellers 
perceived by customers as preferable to other online sellers in terms 
of customer service, ease of shopping, trustworthiness, or any other 
non-price characteristic? (e) Are some offline sellers perceived by 
customers as preferable to other offline sellers in terms of customer 
service, ease of shopping, trustworthiness, or any other non-price 
characteristic? (f) Do contact lens manufacturers charge different 
prices to online and offline sellers? (g) If there are differences in 
the prices manufacturers charge to online and offline sellers, to what 
extent do they reflect differences in the cost of serving online and 
offline sellers, and/or different levels of customer service and 
promotion provided by online and offline sellers?
    13. Please provide any other information regarding the difference 
between online and offline sellers of contact lenses.

Prescriptions That Specify Brand Name or Custom Labeling

    14. Please comment on the incidence of brand name and custom label 
contact lens prescriptions: (a) What is the incidence of contact lens 
prescriptions that specify a brand name? (b) What is the incidence of 
contact lens prescriptions for custom labeled contact lenses? (c) Is 
the incidence of the prescribing practices in (a) and/or (b) increasing 
or decreasing? (d) Please comment on how, if at all, current patterns 
of prescriptions requiring brand name or custom-labeled contact lenses 
may change in response to the Act.
    15. What are the benefits of contact lens prescriptions that 
specify a brand name or custom labeled contact lenses? What are the 
costs of contact lens prescriptions that specify a brand name or custom 
labeled contact lenses?
    16. What role do state laws or regulations play in determining what 
a prescriber must include on a prescription, including whether a 
prescription must contain a brand name?
    17. What is the incidence of brand name or custom labeled contact 
lenses being available only through the prescriber?
    18. How prevalent is consumer awareness that a prescriber may 
prescribe custom labeled or brand name lenses that are available only 
from the prescriber?
    19. Please comment on whether contact lens prescribers advertise 
their ability to prescribe custom labeled lenses or their willingness 
to prescribe contact lenses available from a variety of sellers: (a) 
How prevalent are prescriber advertisements that they prescribe custom 
labeled lenses or advertisements that they prescribe contact lenses 
available from a variety of sellers? (b) Are consumers able to shop for 
prescribers based on whether they prescribe custom labeled contact 
lenses or contact lenses available from a variety of sellers? (c) What 
role do state regulatory or self-regulatory bodies play in controlling 
prescriber advertisements with respect to their ability to prescribe 
custom labeled lenses or their willingness to prescribe contact lenses 
available from a variety of sellers?
    20. Please provide any other information regarding the impact on 
competition of prescriptions that specify brand name or custom labeled 
contact lenses.

Impact of the FTC Eyeglass Rule on Competition

    21. Describe the state of competition in the market for the retail 
sale of prescription eyeglasses at the time that the Commission issued 
the Eyeglass Rule in 1978, including, but not limited to, a description 
of the products included in the market, the market's geographic scope 
(e.g., national, regional, local), the market shares of firms, and any 
barriers to entry.
    22. Referring to the factors listed in question 21, describe how 
competition in the market for the retail sales of prescription 
eyeglasses has changed since the Commission issued the Eyeglass Rule in 
1978.
    23. To what extent are the differences in competition in the market 
for the retail sale of prescription eyeglasses since 1978 attributable 
to the following factors: (a) Changes in federal law, including the 
issuance and enforcement of the Eyeglass Rule; (b) changes in state 
law; (c) changes in industry standards or trade association rules or 
policies; (d) changes in technology; or (e) other changes in the 
marketplace?
    24. To the extent that the changes in competition in the market for 
the retail sale of prescription eyeglasses since 1978 are attributable 
to the issuance and enforcement of the Eyeglass Rule, identify the 
specific Rule provisions that have affected competition, how those 
provisions have affected competition, and the extent of the effect on 
competition.
    25. Has the issuance and enforcement of the Eyeglass Rule affected 
prices in the market for the retail sale of prescription eyeglasses? If 
so, how and to what extent?
    26. Has the issuance and enforcement of the Eyeglass Rule caused or 
prompted states to change their laws or policies regarding prescription 
eyeglasses? If so,

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what changes were made and what effect did they have?
    27. Has the issuance and enforcement of the Eyeglass Rule caused or 
prompted private entities (e.g., trade associations) to change their 
rules or policies relating to prescription eyeglasses? If so, what 
changes were made and what effect did they have?
    28. Please provide any other information regarding the impact on 
competition of the Eyeglass Rule.

Other Issues Related to Competition in the Sale of Prescription Contact 
Lenses

    29. Do state licensing requirements affect out-of-state sellers' 
abilities to compete with in-state sellers or prescribers for the sale 
of prescription contact lenses?
    30. What role do state licensing requirements applicable to sellers 
of contact lenses play in protecting consumers?
    31. Please provide any other information regarding issues that 
affect competition in the sale of prescription contact lenses.
    All persons are hereby given notice of the opportunity to submit 
written data, views, facts, and arguments addressing the issues raised 
by this Notice. Written comments must be submitted on or before June 
24, 2004. Comments should refer to ``Contact Lens Study, Project No. 
V040010,'' to facilitate the organization of comments. A comment filed 
in paper form should include this reference both in the text and on the 
envelope, and should be mailed or delivered to the following address: 
Federal Trade Commission/Office of the Secretary, Room H-159 (Annex L), 
600 Pennsylvania Avenue, NW., Washington, DC 20580. If the comment 
contains any material for which confidential treatment is requested, it 
must be filed in paper (rather than electronic) form, and the first 
page of the document must be clearly labeled ``Confidential.''\7\ The 
FTC is requesting that any comment filed in paper form be sent by 
courier or overnight service, if possible, because U.S. postal mail in 
the Washington area and at the Commission is subject to delay due to 
heightened security precautions. Comments filed in electronic form 
should be sent to the following e-mail box: [email protected].
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    \7\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at www.ftc.gov. As a matter of discretion, the FTC makes 
every effort to remove home contact information for individuals from 
the public comments it receives before placing those comments on the 
FTC Web site. More information, including routine uses permitted by the 
Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-9156 Filed 4-21-04; 8:45 am]
BILLING CODE 6750-01-P