AAI Says FTC Statement on Section 5 Enforcement Principles is Positive Bipartisan Step and Preserves Enforcement Authority

The American Antitrust Institute (AAI) commends the Federal Trade Commission (FTC) for its bipartisan Statement of Enforcement Principles Regarding “Unfair Methods of Competition” Under Section 5 of the FTC Act.

AAI President Diana Moss said, “This policy statement is an achievement for the FTC. The Commission has gained bipartisan consensus on a set of reasonable enforcement principles in an area that conservative critics have found controversial.”

The Statement reaffirms consensus principles that undergird the FTC’s modern Section 5 enforcement, namely that Section 5 performs an important gap-filling function to address anticompetitive conduct that is otherwise not easily reachable under the Sherman Act or Clayton Act, such as invitations to collude or standard-setting abuse.

Such a gap-filling function is particularly important insofar as courts are cutting back on the scope of the Sherman Act due to a mistaken fear that Sherman Act remedies invoked by private parties may excessively deter legitimate conduct, a factor that is inapplicable to Section 5 which has no private right of action.

The Statement also reaffirms the important role that Section 5 was always intended to play in addressing anticompetitive conduct in its incipiency. It notes that Section 5 encompasses acts or practices that “contravene the spirit of the antitrust laws” and that “if allowed to mature or complete, could violate the Sherman or Clayton Act.” And the Statement recognizes the important principle that harm takes two forms – to “competition” itself and to the “competitive process.”

Finally, the Statement implicitly recognizes that the articulation of more specific guidance as to the legality of particular practices can be done on a case-by-case, or common-law, basis just as the courts have been doing under the Sherman Act for 125 years. It neither opens nor shuts the door on specific guidelines at an appropriate future time.

AAI’s General Counsel Richard Brunell noted “We do not see anything in the Commission’s statement of enforcement principles that would limit the sensible use of Section 5. That is a positive step forward for competition enforcement.”


Media Contact:
Diana Moss, President, American Antitrust Institute
(202) 536-3408