Spoiled Business

Spoiled Business
(AP Photo/Richard Drew)
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America’s businesses are spoiled. They sermonize the strengths of a free and fair market during times when things look up for their interests. Don’t tax or regulate even though wages are stagnant, unemployment is high, and economic displacement is hurting millions of families – ‘No, leave us be … let the economy work’. However, whenever the free market turns against them and they are faced with competition, they fall hands and knees at the foot of the government, legal system, and, by extension, the American people for help.

Nowhere is this more apparent than the current lawsuit between Lens.com and Alcon Vision. Alcon, a producer of contact lenses, had over a billion dollars in sales in 2020 alone – in the midst of a pandemic and a massive economic lockdown. In their lawsuit, Alcon claims that Lens.com is disrupting their brand and posing a danger to the public. Upon closer examination of the case, their arguments for health/safety concerns is ridiculously unfounded, at best, and, at worst, is dishonest. The real issue is Alon’s problem with discounters – i.e., Alcon is losing in the marketplace.

Alcon is engaging in corporatism – i.e., bad corporate actors who use the coercive powers of government and the legal system to gain a competitive advantage they could not earn in the market. Contact lens manufacturers –including Alcon, and other large manufacturers, have attempted to protect their pricing and market position from discounters and online competition that threatens their pricing model. Alcon, for example, is a powerful company, “a global leader in eye care.” However, consumer organizations have warned that manufacturers have been “restricting consumer choice in an industry that has long been accused of anticompetitive practices.”

Alcon’s lawsuit is over a triviality while their real goal is to make consumers purchase their lenses from manufacturers, Eye Care Practitioners, and optometrists at artificially high prices so lenses can no longer be sold at a discount. What’s more, Alcon has engaged in anti-competitive tactics to push contact lens discounters out of the market by implementing a Unilateral Pricing Policy (UPP) which mandates a minimum retail price for certain lenses. For non-economists, a UPP is a type of price fixing that keeps the cost of a product artificially high.

When the UPP failed, Alcon sued Lens.com over trivial issues involving branding infringements. “Alcon, the largest eye care device company in the world, has filed trademark infringement lawsuits against the nation’s second largest online contact lens discounter. Legal actions pursued not to defend Alcon’s property rights or to protect its customers. No, on the contrary, these lawsuits are meant to cripple Alcon’s competition, and force them into licensing agreements that will actually harm lens wearers. The alleged trademark issue is about packaging, not the actual contacts. Alcon’s lawsuit is over a triviality while their real goal is to make online discounters buy 100% of their lenses from Alcon at artificially high prices so lenses can no longer be sold at a discount. That will drive-up prices for millions of consumers.” Alcon has purposefully redesigned its packaging to prevent discounters from selling lenses at a lower wholesale price.

American businesses need to stop looking at crony shortcuts as a way of avoiding market competition. Too often the greatest threat to free markets are the very corporations who claim to want and support a free market. Anti-consumer corporate policies are not free market – Alcon is just a spoiled business.

Jack Rowing is a politics major at the Catholic University of America and an assistant editor at RealClearHealth. Jerry Rogers is the editor of RealClearHealth and the host of the 'Jerry Rogers Show' on WBAL NewsRadio. Follow him on Twitter @JerryRogersShow.

 

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