Over 100 years since Congress passed the Federal Trade Commission Act, the Federal Trade Commission has finally issued formal guidance interpreting the central provision underlying the agency’s antitrust enforcement authority. Under Section 5 of the FTC Act, the FTC can take action against “unfair methods of competition in or affecting commerce.” The key phrase—”unfair methods of competition”—has been understood to include Sherman and Clayton act violations as well as some conduct beyond the reach of those statutes. But the precise scope of the FTC’s “standalone” authority under Section 5 has never been made clear.
This week, however, FTC Chairwoman Edith Ramirez announced that the FTC had voted to issue a formal statement setting forth three “enforcement principles” governing its authority over “unfair methods of competition.” As Ramirez explained them, the principles that guide the FTC, when determining what conduct constitutes a “standalone” Section 5 violation, are as follows:
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