IP/Internet/Antitrust Professor Amicus Brief in 1-800 Contacts v. FTC

September 24, 2019 · by Eric Goldman · in Licensing/Contracts, Search Engines, Trademark

Prof. Mark Lemley (Stanford Law) and I filed an amicus brief in 1-800 Contacts v. FTC with the Second Circuit on behalf of 29 professors of intellectual property, Internet law, and antitrust. The abstract:

The case involves 1-800 Contacts’ settlement agreements with its online competitors in which they agreed not to bid on each other’s trademarks as keywords for search engine advertising. The FTC held that 1-800 Contacts’ conduct violated antitrust law.

The brief makes two main points. First, the brief shows how game theory explains 1-800 Contacts’ use of settlement agreements for anticompetitive purposes. Second, the brief explains how trademark law provided only pretextual justification for 1-800 Contacts’ settlement campaign.

I particularly think the game theory piece adds an interesting analytical tool to the conversation. I don’t recall seeing a similar analysis before.

Personal note: this is my first time co-authoring with Mark, one of the giants in our field. It’s a great honor for me.

MediaPost coverage of the amicus brief filing.

1-800 Contacts v. FTC Case Library: The FTC maintains a page with public filings in this case. Here’s a selected library of materials (including some not on the FTC page):

* Second Circuit Appeal. 1-800 Contacts’ appellant brief. Amicus briefs from AIPLA, USCIB, WLF/Academics. FTC Answering Brief. Amicus brief from IP/Internet/Antitrust professors.

* FTC opinions: majority by Commissioner Simons, concurrence by Commissioner Slaughter, dissent by Commissioner Phillips. Final order. Blog post: Restricting Competitive Keyword Ads Is Anti-Competitive–FTC v. 1-800 Contacts

* ALJ opinion. Blog post: Interesting Tidbits From FTC’s Antitrust Win Against 1-800 Contacts’ Keyword Ad Restrictions.

* Some expert reports and related material: Howard Hogan. Dr. William Landes. Rebecca Tushnet’s rebuttal report. Prof. Rebecca Tushnet Slides. Dr. Evans’ Slides. Dr. Susan Athey’s slides (see the exhibit).

* Respondent’s Second Corrected Pretrial Brief. Blog post: 1-800 Contacts Charges Higher Prices Than Its Online Competitors, But They Are OK With That–FTC v. 1-800 Contacts

* Complaint Counsel’s Corrected Pre-Trial Brief and Exhibits. Blog post: FTC Explains Why It Thinks 1-800 Contacts’ Keyword Ad Settlements Were Anti-Competitive–FTC v. 1-800 Contacts

* FTC Complaint from Aug. 2016. Blog post: FTC Sues 1-800 Contacts For Restricting Competitive Keyword Advertising

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