US: FTC needs big improvement to define ‘unfair’ competition methods, says Commissioner Wright

The US Federal Trade Commission’s efforts to define “unfair methods of competition,” as stated in Section 5 of the FTC Act, have been mediocre thus far, according to FTC Commissioner Wright. Wright delivered a speech on Section 5 to the New York Bar Association’s Antitrust Section to discuss the clause, which bestows the task of what constitutes “unfair” business practices. But almost a century after the FTC was founded, the regulator’s efforts to fulfill that task have been “uninspiring if not bleak,” according to Wright. The Commissioner has prioritized the task, however, offering a Policy Statement to clearly define unfair methods of competition based on “modern economics and antitrust jurisprudence.” While the proposal is described as a mere “starting point” to the discussion on Section 5, Wright’s proposal offers an outline to define “unfair” as a business practice that “harms or is likely to harm competition significantly” as well as one that “lacks cognizable efficiencies,” according to the Policy Statement. Going forward, said the Commissioner, the FTC must now focus on clarifying what differentiates acceptable and unfair business practices.