Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Commissioner Wright continues call for FTC guidance on Section 5 authority, (Mar 27, 2014)

By Jeffrey May, J.D.

FTC Commissioner Joshua D. Wright reiterated his call for a Section 5 policy statement or guidance, defining the scope of the Commission’s unfair methods of competition (UMC) authority outside the traditional antitrust laws. “The record screams out for guidelines,” Wright stressed in remarks delivered today at the American Bar Association Section of Antitrust Law Spring Meeting in Washington, D.C. “It is a boundless standard,” said Wright.

The Commissioner believes that it is the job of the FTC to recraft Section 5, which generally prohibits “unfair or deceptive acts or practices in or affecting commerce.” He noted that the agency has lots of other guidelines, some which touch on issues far less important than this one. Wright has suggested that the absence of Section 5 guidance is counterproductive to the FTC’s competition mission.

Antitrust ought to focus on conduct that harms competition, Wright contends. Thus, the Commissioner’s guidelines would limit UMC cases outside the Sherman Act to conduct that results in harm to the competitive process or plainly anticompetitive conduct. Wright believes that there is a general consensus building around the idea that Section 5 should be treated like an antitrust statute and that the challenged conduct must cause harm to competition.

Another limiting factor under Wright’s standard is that UMC cases should not involve plausible efficiency claims. Wright suggests that his standard would not decimate UMC enforcement, as some detractors have suggested. Deception in the standard setting process, private invitations to collude, and a majority of the other conduct currently challenged by the agency as a UMC would still be within the scope of Section 5, he noted.

Former FTC Commissioner Terry Calvani, another panelist, supported the creation of Section 5 guidelines, saying the history calls out for guidance. He was befuddled by the argument that guidelines are not needed. Transparency is a good idea, according to Calvani. Additionally, a common-law evolution of the law is not workable. Calvani suggested that the Commission doesn’t pay any attention to its own precedent.

News: Antitrust FederalTradeCommissionNews