Transitions Optical announced that it reached a preliminary agreement with the U.S. Federal Trade Commission (FTC) on March 2 that will lead the company to change some of its business practices for the sale of photochromic lenses, coatings and other products in the U.S., notably regarding some of its exclusive or preferred relationships with its customers. Company officials declined to comment on any possible changes in Transitions' business practices in Europe.
The U.S. settlement follows a complaint issued by the FTC after a series of directly and indirectly related investigations. Industry observers noted that FTC has scuppered three and a half years a plan by Transitions to take over a competitor, Vision-Ease, on anti-trust grounds. It further delayed its approval of Essilor's takeover of Signet Armorlite, a major supplier of photochromic lenses that uses Corning's Sunsensors technology.
Essilor owns 49 percent of Transitions, which is controlled by PPG Industries. Industry sources said the FTC ordered Signet to divest its photochromic business as a condition for the company's takeover by Essilor, but no buyers could be found. As indicated further down, the FTC finally gave its nod to Signet's takeover at about the same time as it settled matters with Transitions.
The FTC complains that Transitions has been using monopolistic and unfair methods of competition, refusing to work with lens casters that sold the photochromic lenses of other suppliers. It also accused Transitions of using its «monopoly power» to strike special agreements with wholesale optical laboratories and retail chains that unfairly restricted the competitors' ability to sell products to them. It said that consumers were forced to pay more for their lenses as a result of these anti-trust practices.
Transitions said it does not believe to have violated any federal or state laws and stated that the preliminary consent agreement it has signed with the FTC goes beyond what would be required under U.S. legislation. It said it will ensure company-wide compliance with the proposed changes in its business practices.
Generally, the order bans Transitions from exclusive agreements with lens casters and regulates the way it can deal with labs and retailers, limiting exclusivity to only some of its products. The order prohibits Transitions from using its pricing and marketing policies and programs to retaliate against or punish direct or indirect customers who refuse to sell its photochromic products exclusively.
The company has posted all the documents relating to the proposed settlement with the FTC on a dedicated website, www.transitionsagreement.com, offering to respond to any inquiries on the matter. The FTC will wait for any public comments on the proposed settlement until April 5 before issuing a final order in the matter. Transitions will the have 60 days to present a report outlining how it is complying with the order, and repeat this annually.