Symposium Advances Debate Over FTC's Section 5 Enforcement Powers

What is an “unfair method of competition” for purposes of the Federal Trade Commission’s enforcement powers? For more than 100 years, lawyers, economists and other experts—as well as courts—have debated that question, trying to determine exactly what conduct Congress meant to prohibit, beyond conduct already condemned by the antitrust laws, when it enacted Section 5 of the FTC Act of 1914. The Baker & Hostetler-sponsored Symposium on Section 5, held in Washington, D.C., on Feb. 26, assembled, for the first time in a public forum, key decision-makers and experts from all three branches of government to debate the future of FTC’s competition enforcement authority as the agency embarks on its second century. (The last symposium on Section 5 took place in 2008 but was an internal workshop for the FTC.) The vigorous exchange of opinions among the 14 distinguished symposium speakers clarified the terms of the dialogue over whether the FTC should adopt formal guidelines to finally define “unfair methods of competition” and place limits on its enforcement discretion under its “stand-alone” Section 5 authority—that is, its power to pursue anti-competitive conduct not reached by the Sherman or Clayton antitrust acts.

Guidelines or No Guidelines?

FTC Commissioner Joshua Wright, the symposium’s keynote speaker, inaugurated his tenure at the agency in 2013 by proposing a policy statement in favor of Section 5 guidelines based on well-defined economic and legal criteria. Since then, the competition community—including the commission itself—has divided into pro-guidelines and anti-guidelines camps, with the pro-guidelines camp further divided into factions that support competing criteria for guidelines. At the symposium, Wright welcomed the robust discussion sparked by his proposal and reaffirmed his view that formal guidelines are needed to safeguard the FTC’s independence, strengthen its enforcement efforts in the courts, and reduce harmful uncertainty for business. He cited the Horizontal Merger Guidelines used by the FTC and the U.S. Department of Justice for years as a model, noting that they have proven to be “one of the most significant contributions to antitrust law and policy and have greatly benefited the antitrust agencies, the federal courts, and the business community.” (Recordings from the symposium can be found at http://goo.gl/FlmWx8.)