US: FTC’s Ohlausen champions limited reach of Section 5 authority

In a speech delivered Thursday at the US Chamber of Commerce, Federal Trade Commissioner Maureen K. Olhausen tackled the issue of Section 5 of the FTC Act, a continuance of the internal discussion as to the extent of the regulator’s authority over “unfair methods of competition.” The FTC’s exercise of that authority over the last several decades has “launched the agency into a sea of uncertainty,” said Olhausen, as to the proper interpretation of the concept of “unfair acts or practices.” In her speech, the Commissioner championed a limited reach of the FTC’s Section 5 authority, asking the question, “Why will consumers and competition be better off in the future by the FTC using our UMC authority more expansively?” Olhausen outlined proposed boundaries for the regulator, suggesting the use of so-called UMC only when there is the threat of “substantial harm to competition” and when there is “no procompetitive justification for the challenged conduct.” In a statement responding to Olhausen’s proposal, FTC Commissioner Joshua D. Wright backed his colleague:

I applaud Commissioner Ohlhausen for offering her thoughtful views on the appropriate boundaries of the FTC’s unfair methods of competition authority under Section 5. I look forward to working with each of my colleagues at the Commission, as well as consumer groups, the business community, and the antitrust bar, on this important issue in the coming months. I believe there is a vast area of agreement on the proper use of Section 5, and that the Commission can find a consensus position that strengthens our ability to target anticompetitive conduct and provides businesses with much needed guidance.

Olhausen’s full speech can be read here.

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