‘Cease and desist,’ FTC judge tells NC dental board
Washington—Dentist and nondentist teeth whitening services “are reasonably interchangeable” and “comparable” whether offered in the dental office or shopping mall, a Federal Trade Commission judge said in a July 14 antitrust ruling.
Chief Administrative Law Judge D. Michael Chappell told the North Carolina State Board of Dental Examiners to “cease and desist from directing a nondentist teeth whitening provider to cease providing teeth whitening services or teeth whitening goods provided in conjunction with those services … as well as from prohibiting, restricting, impeding or discouraging the provision of such goods and services.”
The decision is subject to review by the full Commission.
Dental board attorney Noel Allen said the board will appeal the order to the Commission and, if necessary, to a federal appeals court. “The unprecedented decision overrides North Carolina’s long-established right to define and regulate the practice of dentistry for our citizens,” he said. “It also poses a challenge to dozens of other North Carolina state agencies, such as the boards governing attorneys, physicians and nurses, which routinely enforce statutes restricting the practice of law, medicine and nursing to persons who have the training and education that the legislature has determined is necessary to protect the public.”
Judge Chappell’s initial decision examined “the relevant market in which to evaluate the conduct of the Dental Board” and said it comprises services provided by dentists in clinical settings and nondentists in mall kiosks, spas, retail stores and salons. “The product market is the provision of teeth whitening services by dentists and nondentists and does not include self-administered whitening products,” he said in a 136-page proposed order. “The evidence … establishes that dentists and nondentist teeth whitening services are viewed by consumers as performing the same function—effective teeth-whitening performed in one session—and, thus, are reasonably interchangeable. Dentists and nondentist providers also view themselves as offering comparable services,” he said.
“The evidence also establishes that self-administered teeth whitening products are not reasonably interchangeable with dentist and nondentist providers of teeth whitening services because the products do not achieve the same results sought by consumers. Accordingly, the relevant market in which to assess the challenged restraint of trade is the provision of teeth whitening services in North Carolina.”
The FTC filed a complaint June 17, 2010, alleging illegal conduct by the dental board in attempting to exclude nondentists from competing with dentists in providing teeth whitening services. Judge Chappell presided at a Feb. 17-March 16, 2011, administrative trial. More than 800 exhibits were admitted, 16 witnesses testified and the trial transcript included 3,047 pages. The July 14 decision, which initiated the appeals process, was posted July 19 at the FTC website.
“Complaint counsel has demonstrated by preponderance of the evidence that dentist members of the board had a common scheme or design, and hence an agreement, to exclude nondentists from the market for teeth whitening services and to deter potential providers of teeth whitening services from entering the market,” the judge concluded.
Mr. Allen said the FTC filed the complaint “after teeth-whitening officials sought to disrupt the dental board’s efforts to clamp down on illegal teeth whitening services in malls, spas and salons.” It is “ironic that the FTC, a federal agency established to protect consumers, has been goaded into action by self-serving teeth whitening industry representatives who want to prevent the dental board from protecting consumers,” Mr. Allen said.
Judge Chappell’s order, if approved by the full Commission, “requires the board to cease and desist from directing a nondentist teeth whitening provider to cease providing teeth whitening services, or teeth whitening goods provided in conjunction with those services.” He rejected as “overbroad” language that FTC counsel recommended to prohibit the board from engaging in any action that restrains, inhibits, deters or otherwise excludes the provision of teeth whitening goods or services.
“Accordingly, the order does not prohibit communicating that a nondentist provider ‘may be’ violating the [North Carolina] Dental Practice Act,” he said, adding that nothing in the order prohibits the board from engaging in certain conduct and communications such as investigating a nondentist provider for suspected violations of the dental practice act.
“This additional provision is necessary to give full effect to the rights retained by the board to investigate, issue notifications and pursue bona fide remedies regarding teeth whitening goods and services,” Judge Chappell said.