Key Takeaways
- The Federal Trade Commission (FTC) issued a historic statement, setting out a new framework for assessing “standalone” claims of “unfair methods of competition” that can be brought by the FTC alone under Section 5 of the FTC Act and that do not independently violate the Sherman, Clayton or Robinson-Patman acts.
- Although the FTC’s new interpretation of Section 5 is far broader and more aggressive than it has been in the past, it is unclear what conduct the FTC will deem “unfair” going forward and what criteria it will use to make that determination.
- One commissioner dissented from the FTC’s statement, fearing that its unclear framework will create uncertainty for businesses, undermine consumer welfare and competition, and delegitimize the FTC’s enforcement efforts.
Introduction
Following its repudiation of its prior enforcement regime in July 2021, the FTC on Nov. 10 issued a Statement Regarding the Scope of “Unfair Methods of Competition” Under Section 5 of the Federal Trade Commission Act (Statement). The Statement, however, creates significant uncertainty for businesses seeking to predict (1) what conduct will be deemed by the FTC to run afoul of Section 5 and (2) what analytical structure the FTC will use to make that determination. We have considerable experience analyzing and successfully litigating the FTC’s authority under Section 5. We will continue to monitor this significant development as it unfolds and provide additional client alerts along with our analysis.
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