Restrictive Interpretations of Statutes and Regulations May Limit Competition from Internet Sellers and Increase Consumer Costs
In comments provided yesterday to the Connecticut Board of Examiners for Opticians, staff of the Bureau of Consumer Protection and the Office of Policy Planning of the Federal Trade Commission said that a restrictive interpretation of state laws related to the sale of contact lenses may seriously limit competition by Internet, telephone, and mail order sellers of contact lenses, increase consumer costs, and diminish consumer convenience without providing an offsetting benefit to either public health or safety. Such an interpretation, FTC staff concluded, could raise replacement contact lens prices for some consumers and diminish consumers' ability to buy their lenses via telephone, mail order, or over the Internet. The comments were provided as part of a declaratory ruling proceeding on the interpretation and applicability of various state statutes and regulations concerning the sale of contact lenses. The staff consulted with the Connecticut Attorney General's office on Connecticut state law issues.
In its proceeding, the Board is considering three issues on which it sought comments: 1) Whether a contact lens seller located in Connecticut is in compliance with state laws if it sells lenses to Connecticut residents without a Connecticut optician license and optical establishment permit, or an optometric or medical license; 2) Whether a contact lens seller located outside Connecticut is in compliance with state law if it sells lenses to Connecticut residents and does not hold a Connecticut optician license and optical establishment permit, or an optometric or medical license; and 3) Whether a contact lens seller, whether in-state or out-of-state, that sells lenses to a Connecticut consumer without first receiving a prescription from a licensed physician or optometrist is in compliance with Connecticut law.
Although the questions are phrased in a general manner, apparently covering all contact lens sellers, the questions originated as a result of ongoing controversy created by the relatively recent emergence of stand-alone firms that sell only replacement contact lenses to customers who have already received a prescription from an eye doctor. The FTC staff comments suggest that a restrictive interpretation of Connecticut law could diminish competition from these relatively recent entrants, who often sell via mail order or over the Internet.
According to the FTC staff comments, which are available on the Commission's Web site as a link to this press release, requiring stand-alone sellers of replacement contacts to obtain Connecticut optician's and optical establishment licenses "would likely increase consumer costs while producing no offsetting health benefits." "Indeed," FTC staff concluded, "such licensing could harm public health by raising the cost of replacement contact lenses, inducing consumers to replace the lenses less frequently than doctors recommend or to substitute other forms of contact lenses that pose greater health risks."
FTC staff said that, even if the Board imposes no new requirements through the proceeding, federal and state regulations already provide significant protections for the health and safety of contact lens wearers, regardless of where or how they bought their lenses. Current federal and state prescription requirements and consumer protection laws are sufficient to address the health problems associated with contact lens use.
Finally, FTC staff said that since the ways in which prescription requirements are interpreted and enforced may also have competitive consequences, the Board can maximize consumer benefits by following the most pro-competitive approach consistent with protecting consumers' health. Consumers who wish to order lenses by phone, mail, or Internet can provide their prescription information to lens sellers via mail, fax, phone, or Internet. The lens seller can contact the consumer's doctor in the same ways, in order to verify the prescription, and the information provided by the consumer can be presumed to be verified if the lens seller gives the consumer's doctor sufficient opportunity to correct any errors.
In concluding the comments, staff said that an overly narrow interpretation of Connecticut law on these issues likely will have two detrimental effects: 1) it will restrict the choices available to Connecticut consumers, raise their costs, and reduce their convenience unnecessarily; and 2) it will serve as a barrier to the expansion of Internet commerce in the State of Connecticut.
The Commission vote authorizing staff to file the comments in the declaratory proceeding was 4-0, with Commissioner Sheila Anthony not participating. The comments were submitted to the Board on March 27, 2002.
NOTE: The views expressed in the comments are those of the staff of the FTC's Bureau of Consumer Protection and the Office of Policy Planning, and do not necessarily represent those of the Commission or any individual commissioner.
Copies of the staff comments 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 works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
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