[Federal Register Volume 86, Number 196 (Thursday, October 14, 2021)]
[Notices]
[Pages 57145-57147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22443]


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FEDERAL TRADE COMMISSION

[File No. 191 0153]


Board of Dental Examiners of Alabama; Analysis of Agreement 
Containing Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis of Proposed Consent Order to Aid Public Comment 
describes both the allegations in the complaint and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before November 15, 2021.

ADDRESSES: Interested parties may file comments online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write: ``Alabama Board 
of Dental Examiners; File No. 191 0153'' on your comment, and file your 
comment online at www.regulations.gov by following the instructions on 
the web-based form. If you prefer to file your comment on paper, please 
mail your comment to the following address: Federal Trade Commission, 
Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 
(Annex D), Washington, DC 20580; or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Philip Kehl (202-326-2559), Bureau of 
Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis of Agreement Containing Consent Order to Aid Public 
Comment describes the terms of the consent agreement and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC website at 
this web address: https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before November 15, 
2021. Write ``Alabama Board of Dental Examiners; File No. 191 0153'' on 
your comment. Your comment--including your name and your state--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the www.regulations.gov website.
    Due to protective actions in response to the COVID-19 pandemic and 
the agency's heightened security screening, postal mail addressed to 
the Commission will be subject to delay. We strongly encourage you to 
submit your comments online through the www.regulations.gov website.
    If you prefer to file your comment on paper, write ``Alabama Board 
of Dental Examiners; File No. 191 0153'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex D), Washington, DC 20580; or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible 
website at www.regulations.gov, you are solely

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responsible for making sure that your comment does not include any 
sensitive or confidential information. In particular, your comment 
should not include any sensitive personal information, such as your or 
anyone else's Social Security number; date of birth; driver's license 
number or other state identification number, or foreign country 
equivalent; passport number; financial account number; or credit or 
debit card number. You are also solely responsible for making sure your 
comment does not include any sensitive health information, such as 
medical records or other individually identifiable health information. 
In addition, your comment should not include any ``trade secret or any 
commercial or financial information which . . . is privileged or 
confidential''--as provided by Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including in 
particular competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on www.regulations.gov--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from that website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website at http://www.ftc.gov to read this Notice and 
the news release describing this matter. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding, as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before November 15, 2021. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Order To Aid Public Comment

I. Introduction

    The Federal Trade Commission has accepted, subject to final 
approval, a consent agreement with the Board of Dental Examiners of 
Alabama (the ``Board''). The Board is an Alabama state agency comprised 
of six licensed dentists and one licensed dental hygienist. The Board 
is charged with administering dental licensing in Alabama and carrying 
out the provisions of the Alabama Dental Practice Act.
    The consent agreement contains a proposed order addressing 
allegations in the proposed complaint that the Board has unreasonably 
excluded competition from providers of teledentistry-based teeth 
alignment products and services without adequate supervision from 
neutral state officials, in violation of Section 5 of the Federal Trade 
Commission Act, 15 U.S.C. 45.
    The proposed order has been placed on the public record for 30 days 
in order to receive comments from interested persons. Comments received 
during this period will become part of the public record. After 30 
days, the Commission will again review the consent agreement and the 
comments received and will decide whether it should withdraw from the 
consent agreement and take appropriate action or make the proposed 
order final.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the complaint, the consent agreement, or the proposed 
order, or to modify their terms in any way. The consent agreement is 
for settlement purposes only and does not constitute an admission by 
the Board that the law has been violated as alleged in the complaint or 
that the facts alleged in the complaint, other than jurisdictional 
facts, are true.

II. Challenged Conduct

    This matter involves allegations that the Board unreasonably 
impeded competition from new providers of clear aligner therapy in 
Alabama. The Board is a state regulatory agency controlled by 
practicing, Alabama-licensed dentists.
    Braces and clear aligners (removable, fabricated molds) are 
treatment options for misalignment or incorrect relation between teeth 
(called malocclusion). Many patients are prescribed braces or clear 
aligners following a visit to a dentist's or orthodontist's office.
    In recent years, several new firms have launched platforms that 
facilitate treatment for malocclusion using teledentistry. These firms 
typically offer clear aligner therapy at prices substantially below the 
prices associated with treatment using braces or clear aligners 
supplied by a dentist or orthodontist in a traditional office setting. 
To initiate treatment with a clear aligner platform, a prospective 
patient may visit a storefront location, where a non-dentist 
professional will perform a digital scan of the patient's teeth and 
gums to create a 3D image of the patient's mouth. The results of this 
intraoral scan are provided to a dentist working remotely, who 
determines whether the patient is a candidate for clear aligner 
therapy. For reasons of price and convenience, many consumers prefer 
clear aligner therapy supplied through a teledentistry model.
    After the entry and expansion of clear aligner platforms in 
Alabama, in September 2017, the Board voted to amend Alabama 
Administrative Code Sec.  270-X-3.10(o)(2). The Board's interpretation 
of that amendment, in conjunction with other existing Board 
regulations, operates to prohibit non-dentist personnel from taking 
intraoral scans without on-site supervision by a dentist. Following a 
Board vote, in September 2018, the Board sent SmileDirectClub, LLC 
(``SmileDirectClub''), a clear aligner platform, a letter directing 
SmileDirectClub to cease and desist from taking intraoral scans without 
on-site dentist supervision.
    Because of the Board's conduct, consumers in Alabama have been 
deprived of full competition for the treatment of malocclusion. For 
example, because of the Board's conduct, SmileDirectClub has halted a 
planned expansion of storefronts in Alabama.

III. Legal Analysis

    Section 5 of the FTC Act prohibits unfair methods of competition, 
including concerted action prohibited by Section 1 of the Sherman 
Act.\1\ To establish a violation of Section 1, a plaintiff must show 
(1) concerted action that (2) unreasonably restrains competition.\2\
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    \1\ 15 U.S.C. 45; see, e.g., FTC v. Cement Inst., 333 U.S. 683, 
693-94 (1948).
    \2\ 15 U.S.C. 1; see, e.g., National Collegiate Athletic Ass'n 
v. Alston, 141 S Ct. 2141, 2151 (2021); Arizona v. Maricopa County 
Med. Soc., 457 U.S. 332, 342-43 (1982).
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    State regulatory boards comprised of active market participants can 
violate Section 1 by promulgating and

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enforcing rules that harm competition in the industry in which board 
members participate.\3\ The Board's rule amendment and cease-and-desist 
letter harmed competition by impeding consumer access to a low-cost and 
convenient option for the treatment of malocclusion.
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    \3\ See N.C. Bd. of Dental Exam'rs v. FTC, 574 U.S. 494, 510-12 
(2015).
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    The state action defense is not applicable here. Active market 
participants control the Board. Therefore, for the Board's conduct to 
constitute state action, neutral state officials must actively 
supervise the Board's conduct. The State's supervision mechanisms must 
provide ``realistic assurance that a private party's anticompetitive 
conduct promotes state policy, rather than merely the party's 
individual interests.'' \4\
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    \4\ Patrick v. Burget, 486 U.S. 94, 101 (1988).
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    Although the Board's rule amendment was reviewed by Alabama's 
Legislative Services Agency (``LSA''), that review did not satisfy the 
``constant requirements'' of active supervision articulated by the 
Supreme Court.\5\ The LSA did not review the substance of the rule 
amendment, specifically whether the rule comports with clearly 
articulated state policy to displace competition.\6\ Additionally, the 
LSA lacked the authority to veto or modify the Board's decisions.\7\ 
Furthermore, the Board's cease-and-desist letter to SmileDirectClub did 
not receive any review by the LSA or any other state officials.
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    \5\ See N.C. Bd. of Dental Exam'rs, 574 U.S. at 515 (``The Court 
has identified only a few constant requirements of active 
supervision: The supervisor must review the substance of the 
anticompetitive decision, not merely the procedures followed to 
produce it; the supervisor must have the power to veto or modify 
particular decisions to ensure they accord with state policy; and 
the mere potential for state supervision is not an adequate 
substitute for a decision by the State. Further, the state 
supervisor may not itself be an active market participant.'') 
(internal citations and quotations omitted).
    \6\ Instead, the LSA determined, without explanation, that the 
rule amendment ``does not affect competition at all.'' See Exhibit A 
to Brief in Support of Motion to Dismiss (Memo to File from Paula M. 
Greene, Feb. 12, 2018) at 13, 15, Leeds v. Board of Dental Examiners 
of Alabama, No. 2:18-cv-01679, (N.D. Ala. Nov. 21, 2018), ECF No. 
33. Because the LSA made this determination, it did not review 
whether the rule was made pursuant to a clearly articulated state 
policy. See Ala. Code Sec.  41-22-22.1.
    \7\ Alabama statutes provide a procedure by which certain Board 
action may be reviewed by the Alabama Legislature's Joint Committee 
on Administrative Regulation Review. See Ala. Code Sec.  41-22-22.1. 
The Joint Committee did not review the actions at issue in this 
case.
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IV. Proposed Order

    The proposed order seeks to remedy the Board's anticompetitive 
conduct by requiring the Board to cease and desist from requiring on-
site supervision by dentists when non-dentists perform intraoral scans 
on prospective patients.
    Section II of the proposed order addresses the core of the Board's 
anticompetitive conduct. Paragraph II.A. orders the Board to cease and 
desist from requiring non-dentists affiliated with clear aligner 
platforms to maintain on-site dentist supervision when performing 
intraoral scanning. Paragraph II.B. prohibits the Board from impeding 
clear aligner platforms, or dental professionals affiliated with clear 
aligner platforms, from providing clear aligner therapy through remote 
treatment.
    Section III requires the Board to provide notice of the proposed 
order to Board members and employees, and to certain dentists and clear 
aligner platforms. Section IV requires the Board to notify the 
Commission of any changes to its rules related to intraoral scanning or 
clear aligner platforms. Section IX provides that the Order will 
terminate 10 years from the date it is issued.

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-22443 Filed 10-13-21; 8:45 am]
BILLING CODE 6750-01-P