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US: FTC rules against itself in price-fixing case

By  |  February 9, 2014

The US Federal Trade Commission’s recent decision to dismiss the majority of a case it brought against a pipe fittings company has raised eyebrows in the antitrust community and fueled the debate over whether the FTC should continue to be both the prosecutor and the judge of its competition cases.

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    The FTC dismissed Thursday six of the seven counts it had lodged against pipe fitting maker McWane in 2012 for allegations of colluding to fix prices and seeking to obtain a monopoly.

    Last May, an administrative judge from the regulator held a trial for the case and issued a decision that sided with the FTC on four counts but sided with the defendant on the other three.

    Both a prosecutor and a judge

    The FTC’s decision late last week further cuts back the case against the company. But it also reignited conversations about the FTC’s process to both launch a case against a body and also rule on that case.

    Critics have said the FTC essentially governs itself; some companies and Republican members of congress have been none to accuse the regulator of leaning against defendants.

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    At a House Judiciary subcommittee hearing last November, Representative Spencer Bachus (R-AK) argued “a company might wonder whether it is worth putting up a defense at all” with the FTC considering this process.

    But FTC Chairwoman Edith Ramirez defended the rulings in that same meeting, telling officials “it’s quite clear that the process is fair.”

    Thursday’s rulings seem to back Chairwoman Ramirez’s argument as the FTC essentially ruled against itself.

    McWane response

    McWane announced following Thursday’s decision that it was “very pleased” with the dismissal of six of the seven counts, but vowed to appeal the one count with which it lost.

    The FTC ruled on a 3-1 vote that the company did act anticompetitively through a practice alleged to have penalized consumers who did business with McWane rivals.

    Full Content: Wall Street Journal

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