The Federal Trade Commission accused the American Dental Association yesterday of illegally restraining competition among dentists by prohibiting its members from advertising their services and engaging in price competition.
The complaint, which also names the Virginia Dental Association, the Northern Virginia Dental Society, the Indiana Dental Association and the Indianapolis District Dental Society, seeks to end any agreements or codes of ethics that would restrict a dentist's freedom to advertise, solicit patients or independently determine charges for services.
The commission alleged that enforcement of he ADA's "principles of ethics" and of he comparable codes of its constituent societies has stabilized or otherwise interfered with prices of dental services, has denied consumers information - including price information - needed to select a dentist, his restrained dentists' ability to compete, and has hindered development of innovative systems for the delivery of dental services.
The ADA yesterday denied FTC charges that the code violated the law. "Restrictions on dentists' advertising are including in all state laws in addition to the Priciples of Ethics of the proffession," and association statement said. It further contended that "unrestricted advertising would have no economic benefits for the public and instead might lead to serious abuses in the delivery of dental care."
The FTC case is part of a broad attack on restrictive practices in the medical professions. Pending is a similar FTC case brought in 1975 against the American Medical Association, which was accused of illegally restraining competition among doctors by preventing its members from advertising their prices and services.
In addition to announcing the ADA case yesterday, the commission said it has authorized its San Francisco regional office to investigate practices that may illegally restrict entry into the dental profession or otherwise restrain competition. It specifically wants to find out whether restrictions imposed by private and governmental entities, such as licensing arrangements and school accreditation policies, might be unfair acts or practices under the FTC Act.
Americans spent about $7.5 billion for the services of dentists in 1975, according to the FTC, and a substantial amount of that went to the 124,000 members of the ADA and its state and local societies. The FCT said about 95 per cent of all active dentists in the United States belong to the ADA and its constitutent groups. Dentists generally must be members of one of the societies to be eligible for membership in ADA. The Virginia Dental Association has about 2,100 members; the Northern Virginia Dental Society, a component of the Virginia association and the ADA, has about 700 dentist members.
Restrictions on dentists' and doctors' advertising and soliciting are two of many long-standing practices of the professions that have come under attack in the last few years. Last year, the Supreme Court struck down a Virginia law prohibiting the advertising of prescription drug prices by drugists, on grounds that it violated the First Amendment.
A pending case brought by the Justice Department accuses the American Pharmaceutical Association of violating the antitrust laws by restraining competition among pharmacists through an agreement not to advertise.
Also pending is the Antitrust Division's complaint challenging advertising restrictions on lawyers by the American Bar Association. Oral argument is scheduled Tuesday before the Supreme Court on a private case brought against the State Bar of Arizona, challenging advertising restrictions on lawyers on both constitutional and anti-trust grounds.
The FTC also has proposed new rules that would overturn the laws and regulations in every state prohibiting the advertising of retail prices of eyeglasses.