RE: Potential Anti-Trust Violations in the Vision Care Industry

Dear [public official(s)],

As an eye care professional concerned for patients’ needs, I have observed a worrisome trend of consolidation and possible collaboration among dominant corporate entities in the vision care industry. The largest manufacturer of ophthalmic lenses in the world, French-owned Essilor, is acquiring independent U.S. laboratories at an alarming rate and now owns interest in more than 50% of the lens processing capacity in the U.S. A significant percentage of the remaining independent laboratories are distributors of Essilor products and controlled by overly restrictive contracts as a requirement for distributorship. These contracts explicitly prohibit Essilor “partner” laboratories from promoting or even comparing competitors’ products to Essilor’s unless stating Essilor products are superior, regardless of patient need. Since vision care providers rely on laboratories for recommendations in selecting the most appropriate products for their patients, these contracts significantly inhibit consumer choice. Moreover, contract restrictions place undue dependence of otherwise independent businesses, across an entire industry, on a single corporation, reducing competition.

VSP, the nation’s largest managed vision care company also owns laboratories across the U.S. This year VSP decided to cancel a number of contracts with independent laboratories to the apparent benefit of Essilor. The loss of revenue from VSP may put some independent laboratories out of business and reduce competition for Essilor. Nouveau Vision in Redmond, Washington, has filed complaints with the FTC and State of Washington authorities, against Essilor and VSP, for unfair trade practices and possible collusion.

I am deeply concerned about the direction being taken by dominant entities in the vision care industry. When two or three companies move in the direction of taking over an entire industry and dictate their products be recommended above all others regardless of patient need, not only will independent businesses suffer as choices erode, but so will vision care consumers.

I support the action of Nouveau Vision taken against Essilor and VSP in the State of Washington and strongly urge investigation into unfair trade practices within the vision care industry in the State of ____________ (and/or nationwide).

Sincerely,

Name
Position
Business
City, State

-or-

Anonymous for fear of reprisal
City, State

Here is a list of officials you may wish to contact:

Honorable Christine Gregoire
Governor of the State of Wasington
Office of the Governor
P.O. Box 40002
Olympia, WA 98504-0002

Tina E. Kondo
Antitrust Division Chief
Washington State Attorney General’s Office
800 5th Avenue, Suite 2000
Seattle, WA 98104-3188

Honorable Mike Kreidler
Insurance Commissioner
Office of the Insurance Commissioner
P.O. Box 40257
Olympia, WA 98504-0257

Stuart W. Hirschfeld
Northwest Region
Federal Trade Commission
915 Second Ave., Room 2896
Seattle, WA 98174

Senator Tom Coburn
172 Russell Senate Office Bldg.
Washington, DC 20510
Main: 202-224-5754
Fax: 202-224-6008

Senator Max Baucus
280 E Front Street, Ste 100
Missoula, MT 59802
406-329-3123; fax 406-728-7610

Christine Varney
Main Justice Building
950 Pennsylvania Ave, NW
Washington, DC 20530-0001
email antitrust@usdoj.com
ph 202-514-2401; fax 202-616-2645

Mr. Donald S. Clark
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, D.C. 20580

Government officials from your own State

In-house digital surfacing will also allow us the flexibility to offer any coating combination currently available from LKO on all digitally surfaced lenses, including Zeiss Carat Advantage and ICE clear AR. Incremental digital production will begin in November with full production ready by the end of the month.

I took a deep breath, clinched my jaw, and kept reading.

My churning stomach soon gave way to a tinge of excitement. My jaw loosened and the corners of my mouth turned upward as one by one, Judy turned the stereotypes into people opticians love. It seems these stereotypes represent real people with real problems. While they can present a challenge at times, treating them like customers and helping them to leave your store happy can make it all worth while.

My cynicism was unwarranted.

Bravo Judy. Bravo.

In their letter to the Governor, Nouveau cites unreasonable contracts as an example of unfair trade practices, specifically the clause of the Varilux distributor contract which states:

“Any activities of Distributor to advertise, promote, or sell to ECPs any PAL other than Varilux Products as Distributor’s preferred treatment for presbyopia…shall constitute a breach of this agreement.”

In case you were wondering, this statement (and others like it) is precisely why Laramy-K Optical has never distributed or processed Varilux lenses in the nearly twenty years we’ve been in business.

We applaud the fact that someone (Tim Sutich) has the courage to make this kind of stand against Essilor and VSP, particularly in these difficult economic times.

If you own a lab that has been terminated by VSP or subjected to unfair trade practices by either Essilor or VSP, Tim is willing to share what he has learned and help in any way he can. He is actively trying to get other states involved in legal action. Tim has also established a legal defense fund. He can be contacted at 800.365.3611.

In the 260 weeks from 1966 to 1970, there were only thirteen musical acts responsible for every #1 album on the Billboard charts.

He goes on to write…

Sometimes, we define a golden age in a market as a time of stability, when one or a few giants capture all of our attention. AT&T telephones, Superman comics, Beatles records, IBM computers, The New York Times, [Essilor, Luxottica]… and now Google. Choices are easy… Ironically, the success of these winners attracts quixotic entrepreneurs, people who set out to challenge the few who are winning. While we might root for these underdogs, it turns out that they’re not the ones who usually change everything. The powerful are still too powerful.

The real growth and development and the foundations for the next era are laid during the chaotic times, the times that come after the leaders have stumbled.

While it may be true that the smothering presence of large entities can make it nearly impossible for smaller ones to gain a foothold, the quixotic challenger helps to disrupt the surface and create an environment in which the giants may stumble. At a minimum, the trend-bucking entrepreneur holds an ideal position - if he can hold on long enough - to take advantage when the giant eventually falls asleep.

Give them a nice polo or umbrella with your name or logo on it when they purchase a second pair.

[uncomfortable silence…]

Doesn’t sound terribly earth-shattering or original, does it? But wait, there are three things that make this promotion more than just another cheap come-on. First, the name or logo on the item speaks of your company to others (okay, pretty basic). Second, the quality of the item speaks about your company to others (now, we’re getting a little better). And third, the fact that the item is something your customers will likely use outside the home gives them opportunity to speak about your business with friends and associates (ah, word of mouth; the Holy Grail of marketing!).

Always be thinking of ways to make it easier for your customers to talk about you.

Related:

Giving Away the Store

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-E.W.

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-E.S.

An office near me that had several people (none opticians) pass the ABO in May just by using the [OpenOptix ABO] study guide.
-B.F.

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-P.S.

We still need you help. There is much left to do. We need to continue work on the NCLE guide and get the lab manual rolling. As you can see, there is a definitely a demand out there for quality optical education material and providing it for free helps people all over the world in immeasurable ways.

Thanks for your help and keep spreading the word!