From Rancid to Reasonable : Unfair Methods of Competition under State Little FTC Acts

When Congress gave the Federal Trade Commission the power to identify and enjoin unfair methods of competition, it did not create a parallel private right of action as it had for other antitrust laws. Yet approximately two dozen states have since enacted their own “Little FTC Acts,” under which private plaintiffs may sue for damages and other remedies. These poorly understood laws are actively shaping American competition policy on a national scale. The Ninth Circuit recently affirmed the nationwide injunction that Epic Games obtained against Apple under California’s law despite concluding that Apple violated no federal or state antitrust law. Uber has faced liability under these laws from taxi companies seeking to enforce local regulatory monopolies. And employees have used these laws to challenge their employers’ violations of labor laws.This article provides the first scholarly overview of state laws against unfair methods of competition on a national scale. New historical analysis reveals that states originally adopted these laws to provide additional protections against antitrust-style harms. Although they generally require some degree of deference to federal precedent, most states have failed to acknowledge the FTC’s evolving guidance on this subject. Nevertheless, application of these laws broadly tracks the same categories of conduct as the FTC Act covers, including violations of the letter and spirit of antitrust law, statutory and common law, and vaguely defined public policy. Likewise, while private suits for damages raise the costs of wrongly condemning conduct as unfair compared with the FTC’s purely injunctive relief, states have interpreted their laws to ensure that they protect competition, not competitors, and channel relief to the proper parties. Increased awareness of these laws by the FTC itself will allow it to work more closely with state officials to align the objectives of competition policy