Revisiting antitrust institutions: The case for guidelines to recalibrate the FTC’s section 5 unfair methods of Competition Authority

The absence of guidelines identifying the boundaries of the Federal Trade Commission’s authority to prosecute unfair methods of competition under Section 5 has rendered this enforcement tool ineffective in helping the agency fulfill its competition mission. As the Commission approaches its centennial, it should strive to achieve the long overdue goal of articulating a coherent policy for the application of its signature competition statute that ensures it is targeting anticompetitive conduct and not deterring welfare-enhancing behavior.

As the Federal Trade Commission (FTC) enters its second century, it is an especially appropriate time to reflect upon whether the agency’s various enforcement and policy tools are being put to the best possible use to help the agency fulfill its competition mission. Now is the time to sharpen tools that have long been deployed effectively and to evaluate whether tools that have not proven up to the task should be salvaged or scrapped. One of these tools—the Commission’s Unfair Methods of Competition (UMC) authority under Section 5 of the FTC Act—is a particularly suitable candidate for evaluation. I have made no secret of the fact that I think the Commission’s record with respect to Section 5 is bleak. The historical record reveals a remarkable and unfortunate gap between the theoretical

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