The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace. We are a federal institution that is part of the Innovation, Science and Economic Development Canada portfolio.
Bringing competition into focus
Competition Bureau encourages online competition in the eye wear industry
The Competition Bureau (Bureau) has a long history of advocating for increased competition and innovation in the health care sector. For years, the Bureau has provided advice to governments, regulators and other decision-makers (collectively, decision-makers) on ways to enhance competition, while at the same time achieving legitimate public policy goals. Competitive markets are responsible for delivering many of the products and services upon which our health care system relies, and healthy competition can lead to innovation in product and service delivery, increased consumer choice and lower prices.
Over the last few years, the Canadian eye wear industry has been in a state of steady growth, fueled in large part by an increasing number of Canadians requiring corrective lenses. There have been numerous advancements in visual health technologies, and competition in the industry has sparked innovation in products such as eyeglasses and contact lenses. Competition has also led to changes in how eye wear has traditionally been advertised and sold to consumers, most notably via the Internet. However, purchasing prescription eye wear over the Internet may not be so easy in the future given different regulations in place across the country and ongoing litigation that could impact how online eye wear retailers operate.In this edition of the Competition Advocate, the Bureau examines certain regulations governing the dispensing of prescription eye wear, and explores the implications that they may pose for online eye wear retailers. To enable consumers to benefit from online competition in retail eye wear sales,the Bureau calls upon decision-makers to take competition into consideration when implementing and reviewing regulations that govern the industry.
The eye wear industry at a glance
Expenditures on vision care services have been on the rise in Canada since 2012. With an ageing population in need of corrective lenses and eye wear making a comeback on the fashion scene, sales in the industry have flourished. In 2017, retail eye wear sales in Canada were estimated to be nearly $2.1 billion, with prescription eye wear sales accounting for over 80% of the total (or roughly $1.7 billion).
Online competition in the eye wear industry has provided consumers with access to lower-cost products and greater convenience. In 2012, CBC's Marketplace broadcast a segment on the high price of prescription eyeglasses sold in Canada. The CBC reported on price differentials between eyeglasses sold in-store and those sold online. Their findings suggest that eyeglasses sold at traditional brick-and-mortar retail outlets could be at least 50% more expensive than those purchased online.
With the recent surge in online eye wear sales, warnings have come from some industry associations. In a 2014 position statement, the Canadian Association of Optometrists (CAO) cautions that the unregulated sale of eye wear over the Internet can compromise patient care. Similar warnings have been issued by provincial regulatory bodies, including, among others, the Nova Scotia Society of Dispensing Opticians, the College of Opticians of Ontario, the Saskatchewan Association of Optometrists and the Opticians Association of Canada, British Columbia Chapter.
Consumers can benefit from purchasing eye wear Online
Competition in the eye wear industry has provided consumers with access to lower-cost products and greater convenience. In 2012, CBC's Marketplace broadcast segment on the high price of prescription eyeglasses sold in Canada. The CBC reported on price differentials between eyeglasses sold in-store and those sold online. Their findings suggest that eyeglasses sold at traditional brick-and-mortar retail outlets could be at least 50% more expensive than those purchased online.
Further support for lower online vs. offline prices is offered in a study published by the United States Federal Trade Commission (FTC). In their report, the FTC found that contact lenses sold online were on average $15 USD cheaper than those sold offline, though wholesale clubs offered the lowest average prices
overall. An FTC Bureau of Economics Working Paper also examined the online and offline prices of contact lenses and found that, when controlling for differentiated retail services, offline prices were approximately 11% higher than online prices.
In addition to cost savings that can be realized by making purchases over the Internet, nearly half of all Canadians find online shopping to be more convenient than visiting a brick-and-mortar retail outlet. In the online world, customer reach can also extend to regions across Canada, including remote locations that may not be well served by traditional retailers. For example, Internet retailing of eye wear appears to have improved access to eyeglasses and contact lenses for a number of consumers living in rural or otherwise under serviced Ontario communities.
source:
http://www.competitionbureau.gc.ca/e...eng/04377.html
Bookmarks