Title

FTC Articulates Enforcement Policy Against “Unfair Methods of Competition,” Fine-Tunes Merger Review Process
Client Memorandum

Created date

8/17/2015

The Federal Trade Commission commits to weighing costs and benefits of conduct at issue before bringing actions against “unfair methods of competition” under Section 5 of the FTC Act, and updates merger review procedural guidance to reflect current best practices.

Summary

The Federal Trade Commission (“FTC”) issued a statement on Thursday that sets forth its basic approach to challenging business conduct as an “unfair method of competition” under Section 5 of the FTC Act—its first formal articulation of Section 5 policy in the agency’s history. The Commission will evaluate whether business conduct is anticompetitive, consider any countervailing benefits of the conduct at issue, and seek to rely on Section 5 only if the antitrust laws do not sufficiently address anticompetitive harm. On the whole, the FTC’s policy statement echoes rationales for the agency’s recent enforcement involving industry standard-setting, invitation-to-collude, and monopolistic conduct cases. The Commission’s vote was 4-1, with Commissioner Josh Wright, who had pushed for such guidance, joining the majority, and Commissioner Maureen Ohlhausen dissenting.