Unfair Methods of Competition under FTC § 5: Beyond the Sherman Act and an Ex Post Model of Enforcement

Abstract

The Federal Trade Commission is an agency that is independent of the executive branch but not of the judiciary. Although the courts have recognized expansive Commission authority, they have too often applied Sherman Act standards as if the Commission were the Antitrust Division. Three Commission losses from the 1980s retain undue influence although both the times and the Commission have changed.

Unlike the Antitrust Division, the Commission has a mandate to push past the antitrust laws. Its institutional advantage lies in investigation and innovation, not in enforcement ex post. Its mission is to work at the cutting edge of economic theory, to engage in research and development of competition policy at the forefront of changing commercial circumstances.

The article intends, first, to defuse the lingering in terrorem effects of the 1980s decisions and, second, to propose six initiatives for a bold Commission. Everything proceeds from the view that the Commission under section 5 of the Federal Trade Commission Act should enjoin conduct that is likely to displace the process of competition on the merits without legitimate business justification.