Antitrust and Unfair Competition Law

Competition: Fall 2015, Vol 24, No. 2

WHAT YOU SEE ISN’T WHAT YOU GET: HOW THE COLGATE DOCTRINE MAY APPLY TO THE DISPOSABLE CONTACT LENS ANTITRUST LITIGATION

By James M. Mulcahy & Filemon Carrillo1

I. INTRODUCTION

The four largest disposable contact lens manufacturers2 have, within months of each other, implemented minimum resale pricing policies that govern the sales of specific contact lens models. Given the unique prescription method and downstream distribution characteristics of the disposable contact lens industry, many contact lens retailers and consumers maintain that: (a) these policies are anticompetitive and have no legitimate procompetitive justification; and (b) both intrabrand and interbrand3 competition in the disposable contact lens relevant product market are severely limited as a direct result of these pricing policies.

The disposable contact lens manufacturers now are facing claims that have been brought by retailers and disposable contact lens consumers under Section 1 of the federal Sherman Act and Section 16720 the California Cartwright Act.4 These actions allege that the policies implemented by the contact lens manufacturers are anticompetitive and unlawful. The manufacturers, on the other hand, argue that because the policies were implemented unilaterally, they are immune from antitrust liability.

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