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July 11, 2020, 10:28 a.m. EDT

This California legislator is taking on SmileDirectClub

Evan Low is undaunted by aggressive legal tactics of teledentistry company, while sponsoring laws aimed at its business model

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By Therese Poletti, MarketWatch


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California Assemblymember Evan Low has already written one new law aimed at SmileDirectClub Inc.’s business model, and is pushing another through the state legislature.

California Assemblymember Evan Low is not what most people would consider anti-technology.

A Democrat from Campbell, Calif., Low represents several towns and bedroom communities of Silicon Valley in the state legislature, including Cupertino, the hometown of Apple Inc. /zigman2/quotes/202934861/composite AAPL +3.32% . He also was co-chairman of former presidential candidate Andrew Yang’s campaign, and before the pandemic shelved it, he introduced a California basic income bill inspired by Yang’s universal “freedom dividend.”

“I represent Silicon Valley,” Low told MarketWatch in an interview. “I have always been supportive of the tech economy.”

But in the past year, he has become a rare legislator willing to take on the controversial and litigious teledenistry company SmileDirectClub Inc. /zigman2/quotes/214109287/composite SDC +4.13% /zigman2/quotes/214109287/composite SDC +4.13% /zigman2/quotes/214109287/composite SDC +4.13% Low has already written one law signed last October by California Gov. Gavin Newsom, which provided some new protections for those using direct-to-consumer dentistry products. Now, he is backing another new bill with additional protections , but one that in the age of COVID-19 had to be amended to recognize that in-person dental visits cannot be mandated.

SmileDirect is known for taking its battles with critics through the legal system. In May, SmileDirect — which makes lower-cost self-applied straightening aligners for mild to moderate teeth-positioning problems — filed a $2.85 billion defamation lawsuit against NBC News for an investigation into consumer complaints about the company. In that story, Comcast Corp.’s /zigman2/quotes/209472081/composite CMCSA +0.81% NBC interviewed two patients who said they believed SDC aligners caused problems with their teeth and/or bite and caused other problems, like headaches for one patient.

SmileDirectClub called NBC’s story a “hit piece” that ignored data on the lack of credibility of the patients, such as the criminal record of one and the failure to adhere to instructions by the other, and ignored the opportunity to interview patients pleased with their aligner results. NBC told The Wall Street Journal that it stands by its reporting. In its longer, online version of the story, NBC included comments of four patients who had positive experiences.

In its lawsuit against NBC, SmileDirectClub mentioned Low, contending that NBC omitted from its report “the bias of the congressmen who wrote to the FDA and FTC and the state representative (Evan Low) involved with the California regulation discussed,” which the lawsuit credits to “financial ties to dental organizations and doctors who are attempting to block teledentistry, generally, and SDC, in particular.”

Low began tangling with the company last year while researching a review of the continued status of the California Dental Board, which regulates licensed dentists in the state. Low and his staff learned of consumer issues and complaints involving the use of the self-applied aligners by mail, and dug in a bit more, he said in an interview with MarketWatch.

He believed that there needed to be more protections in place for consumers, some of whom have said they had to sign nondisclosure agreements in order to receive a refund for SDC’s treatment plans, which cost less than metal braces or plastic aligners provided by orthodontists.

“We found there could be additional consumer harm, and so we want to limit that,” he said. “Given the info we learned last year, I could not just do nothing.”

Low likens the need for regulations for teledentistry companies like SmileDirectClub to the regulations in optometry. Low is the son of an optometrist, and noted that optometrists want you to buy your glasses and sunglasses in their offices.

“I personally don’t always do that. ...That is my right. ...But the prescription is done by a doctor. This is the same thing,” he said. “I just cannot go to the mall and buy glasses without a prescription, but I went to the mall because my dad had a terrible selection.”

The result of that review by Low and his staff was last October’s AB-1519, which provided protections for teledentistry consumers. It required that all dentists in the state providing orthodontia in the “correction of malpositions of human teeth or the initial use of orthodontic appliances” must review diagnostic digital or conventional radiographs of a patient before diagnosing braces or aligners, or their conduct would be deemed unprofessional under the Dental Practice Act. The law also states that a dental provider shall not ask a patient to sign an agreement that would prevent their ability to file a complaint with the dental board.

“I support innovation, I support tech, but you have to make sure you are doing it in an appropriate fashion. If there is unethical behavior, I am going to call you out,” Low said.

SmileDirectClub said it is in compliance with the law, and tells investors that the dentists in its network review a complete photo set and an intra-oral scan of a patient’s mouth, which, prior to the pandemic, were taken in-person at a SmileShop retail location. Potential patients also can make an impression of their mouth with an at-home kit and send it in to the company, which then creates a dental plan and the aligners.

/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 452.04
+14.54 +3.32%
Volume: 41.49M
Aug. 12, 2020 4:00p
P/E Ratio
34.36
Dividend Yield
0.73%
Market Cap
$1870.59 billion
Rev. per Employee
$1.98M
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/zigman2/quotes/214109287/composite
US : U.S.: Nasdaq
$ 9.32
+0.37 +4.13%
Volume: 9.70M
Aug. 12, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.45 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/214109287/composite
US : U.S.: Nasdaq
$ 9.32
+0.37 +4.13%
Volume: 9.70M
Aug. 12, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.45 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/214109287/composite
US : U.S.: Nasdaq
$ 9.32
+0.37 +4.13%
Volume: 9.70M
Aug. 12, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.45 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/209472081/composite
US : U.S.: Nasdaq
$ 43.34
+0.35 +0.81%
Volume: 10.41M
Aug. 12, 2020 4:00p
P/E Ratio
17.38
Dividend Yield
2.12%
Market Cap
$196.38 billion
Rev. per Employee
$513,625
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Therese Poletti chronicles the machinations of the technology industry for MarketWatch in the Tech Tales column. Before joining MarketWatch, Poletti covered...

Therese Poletti chronicles the machinations of the technology industry for MarketWatch in the Tech Tales column. Before joining MarketWatch, Poletti covered some of the biggest companies in Silicon Valley for the San Jose Mercury News. Previously, she spent over a decade at Reuters, covering a range of beats, from spot news and Wall Street to biotech and technology. Poletti was also the lead reporter on teams at the Mercury News that won two Society of American Business Editors and Writers awards for breaking news and two Society of Professional Journalist awards. She was also a finalist for the Gerald Loeb Awards in the deadline writing category. Poletti is also the author of "Art Deco San Francisco: The Architecture of Timothy Pflueger," published by Princeton Architectural Press.

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