The Federal Trade Commission (FTC) released a new Policy Statement that widens what the commission considers “unfair methods of competition” under Section 5 of the FTC Act. This new statement is intended to increase enforcement of policing unfair practices, but some legal analysts see it as a way for the commission to decide on what constitutes “unfair” regardless of whether the conduct violates the Sherman and Clayton Acts (antitrust laws).
The new policy statement said unfair conduct would be weighed according to a sliding scale and established what the FTC now considers “unfair methods of competition,” saying:
- The conduct must be a method of competition that seeks to gain advantage while avoiding competing on the merits and reduces competition in the market.
- The conduct may be coercive, exploitative, collusive, abusive, deceptive, predatory or involve the use of economic power of a similar nature.
- The conduct must tend to negatively affect competitive conditions by reducing competition between rivals, limiting choice or harming consumers.
In a statement, the FTC described previous policies as restricting its oversight to a narrower set of circumstances, “making it harder for the agency to challenge the full array of anticompetitive behavior in the market.” This new expansion will allow the agency to exercise its “full statutory authority” against companies the FTC deems to be in violation.
The Policy Statement was issued on a 3-1 vote of the commissioners. Dissenting commissioner Christine Wilson criticized the policy as too broad in its reach.