The Korean subsidiary of U.S.-based health care giant Johnson & Johnson will pay fines of 1.86 billion won ($1.6 million) for violating local fair trade regulations in selling its popular Acuvue soft contact lenses in the domestic market, company officials said Thursday.

The Supreme Court on Tuesday ruled in favor of the Fair Trade Commission, concluding a dispute that began when J&J Korea filed a lawsuit to nullify the antitrust watchdog’s claims that it took part in unfair business practices and to reverse the fines and correction order issued in January 2014. 



“Johnson & Johnson Vision Care Korea respects the Supreme Court’s decision. We have been abiding by the FTC’s stipulations since Dec. 24, 2013 and will continue to comply with all related regulations in the future,” J&J Korea told The Korea Herald in a statement.

The FTC had found that J&J Korea -- which imports and sells Acuvue brand contact lenses in Korea -- had included stipulations in its supply contracts forbidding its eyewear store clients from reselling the contacts below a price exclusively set by it from January 2007 to April 2010.

J&J Korea, the uncontested leader in the local contact lens business with a market share of around 45 percent, also halted its supply to stores that did not abide by its guidelines for at least two weeks and up to two months, according to the FTC.

The U.S. health care giant had also stipulated in its contracts that the client stores could not resell the lenses to other eyewear sellers that do not hold a contract with J&J. The FTC viewed the company’s actions as a breach of fair trade regulations and ordered the fines and legal changes.

J&J Korea took the FTC’s decision to court last year on grounds that the “supply suspension was more of a formality rather than a form of substantial punishment, as the company informed its clients of its actions between three and 62 days in advance.”

The Supreme Court delivered its final verdict this week recognizing the FTC’s measures as legal, stating that “the court recognizes that the objective of J&J’s actions was to maintain a monopoly over prices, and that such actions could hinder competition and fair trade in the soft contact lens retail market.”

“We hope that this decision will help spur competition in the contact lens retail market and eliminate price bubbles to alleviate purchase burdens on consumers,” said the FTC in a statement.

By Sohn Ji-young (jys@heraldcorp.com)