Antitrust Class Action Claims EssilorLuxottica, Others Artificially Inflated Prices of Eyewear

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A proposed class action lawsuit claims eyewear industry kingpin EssilorLuxottica and 48 other subsidiaries, manufacturers, retailers and fashion houses have conspired to artificially inflate the price of eyewear products by as much as 1000 percent.

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The 38-page antitrust lawsuit says EssilorLuxottica—an Italian-French corporation and the world’s largest conglomerate in the eyewear industry—is the “instigator and primary enforcer” of a price-fixing conspiracy in the American eyewear market. Also in on the alleged scheme are many of the country’s most popular eyewear brands, including co-defendants Costa Del Mar, Oakley, Bulgari, Chanel, Dolce & Gabbana, Versace, Giorgio Armani, Michael Kors, Prada, Ralph Lauren, Tiffany & Co. and Christian Dior.

In violation of federal and state law, EssilorLuxottica and its host of co-defendants—who together control a supermajority of the leading eyewear brands in the U.S. and more than 80 percent of the prescription eyeglasses and sunglasses markets—have entered into illegal, anticompetitive agreements to “exercise strategic control over the price and supply of eyewear” in the American consumer market, the suit alleges.

“The eyewear over which EssilorLuxottica exercises price-fixing ability is not worth the price consumers pay,” the filing reads. “Some have estimated that the mark-up on consumer eyewear runs as high as 1000 percent.”

To manipulate and inflate product prices to supra-competitive levels, EssilorLuxottica relies on exclusive, multi-year licensing agreements with prominent fashion houses and sales agreements with competing manufacturers, owners or license-holders in the eyewear market, the case contends.

As the complaint tells it, the conglomerate’s licensing agreements with leading fashion houses “in effect give EssilorLuxottica price-setting authority for the eyewear of each of these popular brands.”

The terms of its multi-year sales agreements with competitors similarly defer pricing decisions for sales through retail outlets to EssilorLuxottica, the filing relays.

Additionally, the eyewear behemoth controls the prices of several of its own brands—such as Ray-Ban, Oakley and Costa Del Mar—and imposes restrictions on third-party retailers to prevent them from marketing these proprietary brands at a discounted rate, the lawsuit explains.

“The discount restrictions ensure that no matter the retailer, whether beholden to EssilorLuxottica directly or by contract, the artificial price inflation remains,” the suit says.

Through its vision benefits subsidiary and co-defendant EyeMed, EssilorLuxottica has also entered into anticompetitive agreements with thousands of eyecare providers in the U.S. to deceptively “channel” millions of patients into buying the conglomerate’s “over-priced eyewear,” the case claims.

According to the complaint, EyeMed “mandates and financially incentivizes” its providers to sell EssilorLuxottica eyewear to consumers. In addition, EyeMed’s webpages only market eyewear retail outlets owned by the corporation, such as LensCrafters, Target Optical and Glasses.com, the filing states.

The lawsuit stresses that, at the end of the day, EssilorLuxottica is believed to exercise control over “more than 80 percent of American optometrists.”

The lawsuit looks to represent anyone in the United States who has purchased any non-contact-lens eyewear product of a brand owned or licensed by EssilorLuxottica, or for which EssilorLuxottica has a sales agreement, including any of the defendants’ brands.

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