The Perils of Excessive Discretion: The Elusive Meaning of Unfairness in Section 5 of the FTC Act
Posted by Social Science Research Network
The Perils of Excessive Discretion: The Elusive Meaning of Unfairness in Section 5 of the FTC Act
ABSTRACT: Section 5 of the Federal Trade Commission (FTC) Act gives the FTC an undefined mandate to prosecute “unfair methods of competition.” For nearly 100 years, the Commission has searched tirelessly for the meaning of this amorphous concept. Since 1992, the FTC has continued to define Section 5 through a series of consent decrees. Absent any external constraint, the FTC appears to have broad discretion to define the reach of Section 5 beyond the Sherman Act. This discretion causes uncertainty, which is likely to deter beneficial conduct. It also creates incentives to divert resources from productive to redistributional purposes. The recent FTC investigation of Google illustrates the FTC’s discretion to define the reach of Section 5. This paper suggests that the FTC issue a binding statement making Section 5 coterminous with the Sherman Act or limiting Section 5 to conduct that clearly harms consumers through adverse effects on competition, and that would not otherwise fall under the antitrust laws.
Featured News
Landmark Monopoly Trial Between DOJ and Google Wraps Up
May 2, 2024 by
CPI
Lawmaker Probes FTC and EU’s Role in Amazon’s Failed iRobot Acquisition
May 2, 2024 by
CPI
FTC to Approve Exxon’s $64 Billion Deal with Pioneer Resources, Excludes
May 1, 2024 by
CPI
UK Competition Watchdog Raises Alarm Over Nvidia’s ARM Takeover
May 1, 2024 by
CPI
Sen. Klobuchar Urges Regulators to Probe Collusion in Healthcare Pricing
May 1, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI