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

The FTC is an agency that is independent of the Executive but not the judiciary. While the courts have recognized expansive Commission authority, too often they have applied Sherman Act standards as if the Commission were the Antitrust Division. Three Commission losses in Circuit Courts almost 30 years ago retain undue influence although both the times and the Commission have changed. Unlike the Antitrust Division, the Commission has a mandate under FTC §5 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 paper intends, first, to defuse the lingering interrorum effects of the 1980s decisions and, second, to propose six initiatives for a bold Commission. Everything proceeds from the view that the Commission under FTC §5 should enjoin conduct without legitimate business justification that is likely to displace the process of competition on the merits. The paper appears in the Antitrust Bulletin’s special issue dedicated to the memory of Professor John Flynn