Antitrust Law Daily Wrap Up, AGENCY NEWS: FTC will no longer bring disparate-impact, unfair-discrimination claims, (Aug 7, 2026)

By Christopher M. Longo, J.D.

The policy change reflects the FTC’s view that it lacks statutory authority to pursue disparate-impact claims, and that Section 5 of the FTC Act does not contain an antidiscrimination cause of action.

The Federal Trade Commission announced a policy statement declaring that it will no longer “pursue claims based on disparate-impact or ‘unfair discrimination’ theories.” The agency said it will not bring claims that “impose liability for discrimination without any evidence that anyone intended to discriminate,” and that the Commission “never had authority to impose disparate-impact liability.”

Disparate-impact theory’s problems. In its press release, the FTC stated that disparate-impact theory “presumes that a difference in outcome among demographic groups must be the result of unlawful discrimination, even if no evidence of discrimination exists.” The Commission stated that applying disparate-impact analysis “would require race-based analysis of outcomes” that conflict with “fundamental constitutional values.” The policy statement states that disparate-impact analysis could extend to nearly any policy or practice because different groups often experience different outcomes. The FTC said that if Congress had intended to grant the agency “such sweeping authority,” it could have done so expressly. The policy statement adds that disparate-impact claims are “inconsistent with the Constitution and with equality of opportunity, they impose unnecessary burdens on businesses and the public, and they are contrary to President Trump’s executive order.”

Conformance with executive order. The FTC said that the change in policy follows the issuance of President Trump’s executive order, “Restoring Equality of Opportunity and Meritocracy,” stating that it would be U.S. policy to “to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals.”

Enforcement of discrimination claims “in appropriate contexts.” The Commission said it will continue to pursue discrimination claims where authorized by law. The policy statement states that “[i]ntentional discrimination can be combatted through traditional disparate-treatment claims, and the Commission remains firmly committed to bringing such claims where the law allows.” As an example, the Commission stated that said it “will continue to assert disparate-treatment claims under the Equal Credit Opportunity Act,” but will continue treating Section 5 of the FTC Act “as the consumer-protection statute it has always been.” The policy statement notes that Section 5 “creates no ‘unfair discrimination’ cause of action.”

Review of prior matters. The FTC said it reviewed past decisions that relied on statistical analyses intended to establish disparate-impact liability. As a result, the Commission entered into agreements “to modify certain compliance-related obligations for Napleton Inc., Passport Auto Group and an individual previously associated with Coulter Motor Company LLC.”

The Commission voted 2-0 to authorize the policy statement and approve the related agreements.

News: ConsumerProtection FederalTradeCommissionNews