Transitions Optical, Inc.; Analysis to Aid Public Comment, 10799-10803 [2010-4979]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 75, Number 45 (Tuesday, March 9, 2010)]
[Notices]
[Pages 10799-10803]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-4979]


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FEDERAL TRADE COMMISSION

[File No. 091 0062]


Transitions Optical, Inc.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before April 5, 2010.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Transitions 
Optical, File No. 091 0062'' to facilitate the organization of 
comments. Please note that your comment--including your name and your 
state--will be placed on the public record of this proceeding, 
including on the publicly accessible FTC website, at (https://www.ftc.gov/os/publiccomments.shtm).
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual's Social Security 
Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential. . . .,'' as provided in 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which 
confidential treatment is requested must be filed in paper form, must 
be clearly labeled

[[Page 10800]]

``Confidential,'' and must comply with FTC Rule 4.9(c), 16 CFR 
4.9(c).\1\
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 
4.9(c).
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    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: (https://public.commentworks.com/ftc/transitionsoptical) and following the 
instructions on the web-based form. To ensure that the Commission 
considers an electronic comment, you must file it on the web-based form 
at the weblink: (https://public.commentworks.com/ftc/transitionsoptical). If this Notice appears at (https://www.regulations.gov/search/index.jsp), you may also file an electronic 
comment through that website. The Commission will consider all comments 
that regulations.gov forwards to it. You may also visit the FTC website 
at (https://www.ftc.gov/) to read the Notice and the news release 
describing it.
    A comment filed in paper form should include the ``Transitions 
Optical, File No. 091 0062'' reference both in the text and on the 
envelope, and should be mailed or delivered to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-135 (Annex 
D), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is 
requesting that any comment filed in paper form be sent by courier or 
overnight service, if possible, because U.S. postal mail in the 
Washington area and at the Commission is subject to delay due to 
heightened security precautions.
    The Federal Trade Commission Act (``FTC Act'') and other laws the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives, 
whether filed in paper or electronic form. Comments received will be 
available to the public on the FTC website, to the extent practicable, 
at (https://www.ftc.gov/os/publiccomments.shtm). As a matter of 
discretion, the Commission makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC website. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at (https://www.ftc.gov/ftc/privacy.shtm).

FOR FURTHER INFORMATION CONTACT: Linda M. Holleran (202-326-2267), 
Bureau of Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 the 
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that 
the above-captioned consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for March 3, 2010), on the World Wide Web, at (https://www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington, 
D.C. 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted for public comment an 
Agreement Containing Consent Order to Cease and Desist (``Agreement'') 
with Transitions Optical, Inc. (``Transitions''). The Agreement seeks 
to resolve charges that Transitions used exclusionary acts and 
practices to maintain its monopoly power in the photochromic lens 
industry in violation of Section 5 of the Federal Trade Commission Act, 
15 U.S.C. Sec.  45. Photochromic lenses are corrective ophthalmic 
lenses that darken when exposed to the ultraviolet light present in 
sunlight, and fade back to clear when removed from the ultraviolet 
light.
    The proposed Complaint that accompanies the Agreement 
(``Complaint'') alleges that Transitions has used its monopoly power to 
impose an exclusive-dealing policy on its customers since 1999. As a 
result, Transitions has foreclosed rivals from key distribution 
channels and limited competition in the relevant market, leading to 
higher prices, lower output, reduced innovation and diminished consumer 
choice.
    The Commission anticipates that the competitive issues described in 
the Complaint will be resolved by accepting the proposed Order, subject 
to final approval, contained in the Agreement. The Agreement has been 
placed on the public record for 30 days for receipt of comments from 
interested members of the public. Comments received during this period 
will become part of the public record. After 30 days, the Commission 
will again review the Agreement and comments received, and will decide 
whether it should withdraw from the Agreement or make final the Order 
contained in the Agreement.
    The purpose of this Analysis to Aid Public Comment is to invite and 
facilitate public comment concerning the proposed Order. It is not 
intended to constitute an official interpretation of the Agreement and 
proposed Order or in any way to modify their terms. The Agreement is 
for settlement purposes only and does not constitute an admission by 
Transitions that the law has been violated as alleged in the Complaint 
or that the facts alleged in the Complaint, other than jurisdictional 
facts, are true.

I. The Complaint

    The Complaint makes the following allegations.
A. Industry Background
    This case involves the photochromic lens industry. Consumers of 
corrective ophthalmic lenses (lenses used for vision correction and 
worn in eyeglasses) have the option to purchase those lenses with a 
photochromic treatment, which protects eyes from harmful ultraviolet 
(``UV'') light. A ``photochromic lens,'' which is a corrective 
ophthalmic lens with a photochromic treatment, will darken when it is 
exposed to the UV light present in sunlight, and fade back to clear 
when it is removed from the UV light.
    In 2008, approximately 18 to 20 percent of all corrective 
ophthalmic lenses purchased in the United States were photochromic, and 
photochromic lenses totaled approximately $630 million in sales at the 
wholesale level. Photochromic lenses have characteristics and uses 
distinct from polarized lenses (which are designed to

[[Page 10801]]

remove glare) and fixed-tint lenses (e.g., prescription sunglasses).
    Transitions produces its photochromic lenses in partnership with 
lens manufacturers known as ``lens casters.'' Lens casters supply the 
corrective ophthalmic lenses to Transitions, and Transitions uses 
proprietary methods to apply patented photochromic dyes or other 
photochromic materials to the lenses. Transitions then sells the 
lenses, now photochromic, back to the lens casters. These lens casters 
are Transitions' only direct customers.
    Lens casters, in turn, resell the photochromic lenses to wholesale 
optical laboratories (``wholesale labs'') and optical retailers 
(``retailers''). Wholesale labs generally sell corrective ophthalmic 
lenses, including photochromic lenses, to ophthalmologists, 
optometrists, and opticians (collectively known as ``eye care 
practitioners'') who are not affiliated with retailers. Wholesale labs 
grind the lens according to the lens prescription, fit the lens into an 
eyeglass frame, and deliver the frame with the finished lens back to 
the eye care practitioner. In addition to these laboratory functions, a 
wholesale lab will often employ a sales force to promote specific 
lenses to eye care practitioners. Photochromic lens suppliers, such as 
Transitions, use wholesale labs and their sales forces to market their 
lenses because wholesale labs are the most efficient means for a 
photochromic lens supplier to promote and sell its products to the tens 
of thousands of independent eye care practitioners prescribing 
photochromic lenses to consumers.
    Retailers, on the other hand, combine both eye care practitioner 
and laboratory services. They employ their own eye care practitioners 
who deal directly with consumers. In addition, retailers grind and fit 
lenses into eyeglass frames and deliver the frame with the finished 
lens to the consumer. The retail channel is generally a more efficient 
means for promoting and selling photochromic lenses to consumers than 
comparable efforts through the wholesale lab channel because a single 
sales effort to a large retailer can influence the prescribing behavior 
of hundreds of eye care practitioners. Retailers range from large 
national retail chains to smaller, regional ones.
    This industry structure is reflected in the diagram below.
B. Transitions' Monopoly Power
    Transitions has monopoly power in the relevant market for the 
development, manufacture and sale of photochromic treatments for 
corrective ophthalmic lenses in the United States. Transitions has 
garnered a persistently high share of at least 80 percent of this 
market over the past five years, and over 85 percent in 2008. The 
photochromic lens industry has high barriers to entry, which include 
significant product development costs and capital requirements, 
substantial intellectual property rights, regulatory requirements, and 
Transitions' anticompetitive and exclusionary conduct. Direct evidence 
of Transitions' ability to exclude competitors and to control prices 
confirms Transitions' monopoly power.
[GRAPHIC] [TIFF OMITTED] TN09MR10.015

C. Transitions' Conduct
    Transitions has maintained its dominance, in significant part, by 
implementing exclusive agreements and other exclusionary policies at 
nearly every level of the photochromic lens distribution chain.
1. Exclusionary Practices with Direct Customers (Lens Casters)
    In 1999, Corning Inc. introduced a new plastic photochromic lens, 
Sunsensors[reg], which was a direct challenge to Transitions. 
Transitions responded to this competitive threat by terminating the 
first lens caster that began selling the new SunSensors[reg] lens, 
Signet Armorlite, Inc. (``Signet''), and by adopting a general policy 
not to deal with lens casters that sold or promoted a competing 
photochromic lens. Transitions furthered its anticompetitive and 
exclusionary efforts by, among other things: (i) entering into 
exclusive agreements with certain lens casters; (ii) announcing to the 
industry its policy of dealing only with lens casters that sold its 
lenses on an exclusive basis; (iii) threatening to terminate lens 
casters that did not want to sell its lenses on an exclusive basis; and 
(iv) terminating a second lens caster, Vision-Ease Lens (``Vision-
Ease''), that developed a photochromic treatment, LifeRx[reg], to apply 
to its own ophthalmic lenses. Because of Transitions' course of 
conduct, even lens casters that have not signed exclusive agreements 
have a clear understanding that they cannot sell or promote a competing 
photochromic lens without being terminated by Transitions.
    Transitions' exclusive policy is coercive to lens casters and acts 
as a powerful deterrent against selling a competing photochromic 
treatment because Transitions is such a large part of the photochromic 
lens market. Losing the sales generated by Transitions' photochromic 
lenses can jeopardize up to 40 percent of a lens caster's overall 
profit. Additionally, losing the ability to sell Transitions' 
photochromic lenses can endanger a lens caster's sales of clear lenses 
because many retailers and wholesale labs (and their eye care 
practitioner customers) prefer to buy both clear and photochromic 
versions of the same lens.

[[Page 10802]]

    For all these reasons, Transitions has succeeded in foreclosing 
competitors from dealing with lens casters collectively accounting for 
over 85 percent of photochromic lens sales in the United States. These 
lens casters deal with Transitions on an exclusive basis and will not 
do business with any other suppliers of photochromic treatments.
2. Exclusionary Practices with Indirect Customers (Retailers and 
Wholesale Labs)
    In an effort to shut out its rivals, Transitions also directed its 
exclusionary practices at its indirect customers: wholesale labs and 
retailers. In 2005, in order to mitigate the new competitive threat 
posed by Vision-Ease's introduction of LifeRx[reg], Transitions began 
an exclusionary agreement campaign with major retailers. Transitions 
induced over 50 retailers, including many of the largest chains, with 
up-front payments and/or rebates to enter into long term exclusive 
agreements that were difficult to terminate.
    Transitions also has entered into over 100 agreements with 
wholesale labs that require the wholesale labs to promote Transitions' 
lenses as their ``preferred'' photochromic lens and to withhold normal 
sales efforts for competing photochromic lenses in exchange for rebates 
or other items of pecuniary value. Further, at least 50 percent of all 
wholesale labs are owned by lens casters that sell only Transitions' 
lenses. Because these lens casters generally use their wholesale labs 
to promote and sell primarily their own brand of lenses, this further 
impairs competitors' access to wholesale labs.
    Additionally, Transitions' agreements with retailers and wholesale 
labs generally provide a discount only if the customer purchases all or 
almost all of its photochromic lens needs from Transitions. Because no 
other supplier has a photochromic treatment that applies to a full line 
of ophthalmic lenses, Transitions' discount structure impairs the 
ability of rivals to compete for sales to these customers. It also 
erects a significant entry barrier by limiting the ability of a rival 
to enter the market with a new photochromic treatment that applies to 
less than a full line of ophthalmic lenses.
    Transitions' exclusionary practices with retailers and wholesale 
labs foreclose rivals, in whole or in part, from a substantial share - 
as much as 40 percent or more - of the retailer and wholesale lab 
distribution channels.
D. Competitive Impact of Transitions' Conduct
    Transitions' course of conduct harms competition by marginalizing 
existing competitors and by deterring new entry. Faced with the threat 
of termination by Transitions, no major lens caster operating in the 
United States has been willing to carry the plastic SunSensors[reg] 
lens since Transitions terminated Signet. Without access to effective 
distribution, Corning has been unable to pose a competitive threat to 
Transitions' monopoly, and has had little incentive to invest in 
research and development to improve its product. Further, some lens 
casters would likely develop and/or sell competing photochromic lenses, 
but Transitions' exclusive dealing - particularly its ``all or 
nothing'' ultimatum to lens casters - effectively deters new entrants.
    Transitions' conduct at the wholesale lab and retailer levels also 
has harmed competition. For example, Transitions deprived Vision-Ease 
of access to many large retailers (one of the most efficient channels 
for distributing photochromic lenses to consumers), which blunted the 
force of its entry into the market and diminished its ability to 
constrain Transitions' exercise of monopoly power. Potential entrants 
observed Transitions' exclusionary campaign against Vision-Ease and 
have been deterred from entering the market.
    Further, Transitions' exclusionary policies at all levels of the 
distribution chain deter potential competitors from entering the market 
on an incremental basis. Transitions' ``all or nothing'' policy with 
lens casters deters them from purchasing or developing a competing 
photochromic treatment that can be applied to less than a full line of 
ophthalmic lenses because the lens caster is unlikely to be able to 
recoup the substantial profits it would have made from the sale of the 
full line of Transitions' products. Similarly, the structure of 
Transitions' discounts to retailers and wholesale labs - which are 
generally conditioned on the customer's purchase of all or almost all 
of Transitions' products - places competitors with less than a full 
line of photochromic lenses at a disadvantage when competing for this 
business.
    Transitions' exclusionary practices have likely increased prices 
and reduced output. For example, because it does not face effective 
competition, Transitions has been able to ignore consumer demand and 
refuse to supply its low-priced, private label photochromic lens in the 
U.S. market, even though Transitions offers this product in other 
markets.
    Transitions' conduct has also harmed consumers by depriving rivals 
of the incentive to innovate and to develop competing photochromic 
lenses. If faced with more competition, Transitions would also likely 
have a greater incentive to invest additional resources in research and 
development.
    There are no procompetitive efficiencies that justify Transitions' 
conduct or outweigh its substantial anticompetitive effects.

II. Legal Analysis

    Exclusive dealing by a monopolist is condemned under Section 2 of 
the Sherman Act, 15 U.S.C. Sec.  2, when the challenged conduct 
significantly impairs the ability of rivals to compete with the 
monopolist and thus to constrain its exercise of monopoly power.\2\ 
Agreements that foreclose key distribution channels are often found to 
have this proscribed effect and are deemed illegal.\3\
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    \2\ See, e.g., Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 
472 U.S. 585, 605 & n.32 (1985) (exclusionary conduct ``tends to 
impair the opportunities of rivals'' but ``either does not further 
competition on the merits or does so in an unnecessarily restrictive 
way'') (citations omitted); Lorain Journal Co. v. United States, 342 
U.S. 143, 151-54 (1951) (condemning newspaper's refusal to deal with 
customers that also advertised on rival radio station because it 
harmed the radio station's ability to compete);United States v. 
Microsoft Corp., 253 F.3d 34, 68-71 (D.C. Cir. 2001) (condemning 
exclusive agreements because they prevented rivals from ``pos[ing] a 
real threat to Microsoft's monopoly''); United States v. Dentsply 
Int'l, Inc., 399 F.3d 181, 191 (3d Cir. 2005) (``test is not total 
foreclosure but whether the challenged practices bar a substantial 
number of rivals or severely restrict the market's ambit''); 
LePage's, Inc. v. 3M, 324 F.3d 141, 159-60 (3d Cir. 2003) (same).
    \3\ See, e.g., Microsoft, 253 F.3d at 64 (condemning exclusive 
agreements that foreclosed rivals from ``cost-efficient'' 
distribution channels); LePage's, 324 F.3d at 159-60 (finding 
``exclusionary conduct cut LePage's off from key retail 
pipelines''). See also Richard A. Posner, ANTITRUST LAW 229 (2d ed. 
2002) (noting that exclusive dealing may ``increase the scale 
necessary for new entry, and . . . increase the time required for 
entry and hence the opportunity for monopoly pricing'').
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    The factual allegations in the Complaint are consistent with a 
finding of monopoly power and competitive harm. Transitions' policy of 
requiring exclusivity from its lens caster customers has foreclosed its 
rivals from over 85 percent of available sales opportunities at this 
level of the distribution chain. This foreclosure is particularly 
significant because nearly all photochromic lenses are first sold by 
lens casters - attempts to fabricate photochromic lenses at the 
wholesale lab or retailer level have largely been abandoned as 
uneconomical. The competitive impact of this exclusive dealing with 
lens casters is amplified by Transitions' exclusionary practices with 
retailers and wholesale labs, which

[[Page 10803]]

further foreclose rivals, in whole or in part, from as much as 40 
percent or more of these downstream distribution channels. Transitions' 
exclusionary conduct has thus likely caused higher prices, lower 
output, and reduced innovation and consumer choice.
    A monopolist may rebut a such a showing of competitive harm by 
demonstrating that the challenged conduct is reasonably necessary to 
achieve a procompetitive benefit.\4\ Any proffered justification, if 
proven, must be balanced against the harm caused by the challenged 
conduct.\5\
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    \4\ E.g., Microsoft, 253 F.3d at 59.
    \5\ Id.
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    No procompetitive efficiencies justify Transitions' exclusionary 
and anticompetitive conduct. Transitions cannot show that the exclusive 
arrangements were reasonably necessary to achieve a procompetitive 
benefit, such as protecting Transitions' intellectual property or 
technical know-how, or preventing interbrand free-riding.\6\ 
Transitions does not transfer substantial intellectual property or 
technical know-how to its customers, and even if it did, any such 
transfer would likely be protected by existing confidentiality 
agreements.
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    \6\ ``Interbrand free-riding'' occurs when a manufacturer 
provides services, training, or other incentives in the promotion of 
its products for which it cannot easily charge its dealer, and that 
dealer ``free-rides'' on these demand-generating services by 
substituting a cheaper, more profitable product made by another 
manufacturer that does not invest in comparable services. See 
generally Howard P. Marvel, Exclusive Dealing, 25 J.L. & Econ. 1, 8 
(1982).
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    A concern about interbrand free-riding also does not justify the 
substantial anticompetitive effects found here. The vast majority of 
Transitions' promotional efforts are brand specific, reducing the 
significance of any free-riding concern.\7\ While Transitions' 
marketing efforts may generate some consumer interest in the product 
category as a whole - and not just in Transitions' own products - this 
is a part of the natural competitive process. This type of consumer 
response does not raise a free-riding concern sufficient to justify the 
substantial anticompetitive effects found here.\8\
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    \7\ See United States v. Dentsply Int'l, Inc., 277 F. Supp. 2d 
387, 445 (D. Del. 2003), aff'd in rel. part, 399 F.3d at 196-97; 
Marvel, Exclusive Dealing, 25 J.L. & Econ. at 8 (explaining that an 
interbrand free-riding justification ``does not apply if the 
promotional investment is purely brand specific. In such cases, the 
dealer will not be in a position to switch customers from brand to 
brand.'').
    \8\ See In re Polygram, 136 F.T.C. 310, 361-62 (2003), aff'd, 
416 F.3d 29, 37-38 (D.C. Cir. 2005).
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III. The Order

    The proposed Order remedies Transitions' anticompetitive and 
exclusionary conduct and imposes certain fencing-in requirements that 
are designed to prevent de facto exclusive dealing.\9\ Paragraph II of 
the Order addresses the core of Transitions' exclusionary conduct and 
seeks to lower entry barriers and to restore competition. Paragraph III 
requires Transitions to implement an antitrust compliance program, 
which includes providing notice of this Order to Transitions' 
customers. Paragraphs IV-VI impose reporting and other compliance 
requirements. The Order expires in 20 years unless otherwise indicated.
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    \9\ We use the term ``de facto exclusive dealing'' to refer to 
practices that significantly deter a customer from purchasing or 
selling a competing photochromic lens.
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    Paragraph II.A prohibits Transitions from adopting or implementing 
any agreement or policy that results in ``exclusivity'' with lens 
casters, or its ``Direct Customers.'' ``Exclusivity'' is defined in the 
Order to include any requirement that a customer limit or refrain from 
dealing with a competing photochromic lens, as well as any requirement 
that a customer give Transitions' products more favorable treatment as 
compared to a competitor's products.
    Paragraph II.B allows Transitions to enter into exclusive 
agreements with retailers and wholesale labs (``Indirect Customers''), 
provided certain safeguards are met. Specifically, any exclusive 
agreements with Indirect Customers must: i) be terminable without 
cause, and without penalty, on 30 days written notice; ii) be available 
on a partially exclusive basis, if requested by the customer; and iii) 
not offer flat payments of monies in exchange for exclusivity. These 
provisions, along with Paragraph II.E, which prohibits Transitions from 
bundling discounts, are designed to enable a competitor or entrant to 
compete for a customer's business, even if it does not offer a 
photochromic treatment that applies to a full line of ophthalmic 
lenses. Creating conditions conducive to effective entry on an 
incremental basis is likely to hasten new entry and to restore 
competition.
    Under Paragraph II.C, Transitions may not limit its customers from 
communicating or discussing a competing photochromic lens with 
consumers and others. This Paragraph also requires Transitions to allow 
a lens caster or another customer that sells Transitions' photochromic 
treatment on a particular brand of lens to sell a competitors' 
photochromic treatment on the same brand.
    Paragraph II.D has two provisions designed to prevent de facto 
exclusive dealing through pricing policies. First, Transitions cannot 
offer market share discounts, i.e., discounts based on the percentage 
of a customer's sales of Transitions' lenses as a percentage of all 
photochromic lens sales. Second, Transitions cannot offer discounts 
that are applied retroactively once a customer reaches a specified 
threshold. For example, Transitions may provide a discount on sales 
beyond 1000 units but it may not lower the price of the first 999 units 
if and when the customer buys the 1000\th\ unit. The provisions in 
Paragraph II.D, along with Paragraph II.E, will be in effect for 10 
years.
    Notwithstanding any provision of the Order, Paragraph II.G 
explicitly allows Transitions to provide volume discounts that reflect 
certain cost differences, and to offer discounts to meet competition. 
It also allows Transitions to require that any monies it provides to 
customers be used solely for the manufacture, promotion or sale of 
Transitions lenses.
    Finally, Paragraph II.F prohibits Transitions from retaliating 
against a customer that purchases or sells Transitions lenses on a non-
exclusive basis.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2010-4979 Filed 3-8-10; 7:23 am]
BILLING CODE 6750-01-S