The Federal Trade Commission will hold a public workshop on October 17, 2008, in Washington, D.C., to explore the scope of the prohibition of “unfair methods of competition” in Section 5 of the FTC Act, 15 U.S.C. § 45. The workshop will consider the appropriate scope of Section 5 in light of legal precedent, economic learning, and changing business practices in a global and hi-tech economy.
The Commission seeks the views of the legal, academic, and business communities on the issues to be explored at the workshop. In its Federal Register notice the agency set out a list of specific questions on which it is particularly seeking comments. A link to that notice can be found below. The agency will consider any comments received as it prepares for the workshop.
Prior to the event the Commission will publish a more detailed agenda on this website. The workshop will be transcribed; the transcript will be placed on the public record; and any written comments received will also be placed on the public record.
Background of the Issue
When Congress created the FTC in 1914, it empowered the agency to prevent “unfair methods of competition” through Section 5 of the FTC Act, 15 U.S.C. § 45. Under Section 5, the Commission may condemn conduct that violates the Sherman Act, 15 U.S.C. § 1-7. But based on its review of the FTC Act’s legislative history, the Supreme Court stated in Sperry & Hutchinson that Section 5 also reaches beyond violations of the Sherman Act to include broader categories of conduct.
The precise reach of Section 5 and its relationship to other antitrust statutes has long been a matter of debate. The Supreme Court observed in Indiana Federation of Dentists that the “standard of ‘unfairness’ under the FTC Act is, by necessity, an elusive one, encompassing not only practices that violate the Sherman Act and the other antitrust laws but also practices that the Commission determines are against public policy for other reasons.” In the early 1980s, however, lower courts were critical of efforts by the FTC to enforce a reading of Section 5 that captured conduct falling outside the Sherman Act. In striking down the FTC’s orders, the Second Circuit in its “Ethyl” decision expressed concern that the Commission’s theory of liability failed “to discriminate between normally acceptable business behavior and conduct that is unreasonable or unacceptable.”
The great majority of FTC non-merger cases enforce the Sherman Act. Beginning in the early 1990s, however, the Commission reached a number of consent agreements in matters involving invitations to collude; practices that facilitate collusion or collusion-like results in the absence of an agreement; and misconduct relating to standard setting. Because the complaints in these matters did not allege all the elements of a Sherman Act violation, the Commission’s theory of liability rested on a broader reach of Section 5. As consents, none of these matters have been reviewed by a court.
The workshop will examine three general subject areas: (1) the history of Section 5, including Congress’s enactment, the FTC’s enforcement, and the courts’ response; (2) the range of possible interpretations of Section 5; and (3) examples of business conduct that may be unfair methods of competition addressable by Section 5. The Commission particularly seeks the input of the business community in preparing this last topic.
Specific questions of particular interest were identified in the Federal Register notice announcing the workshop, which can be found in the list of links below.
LINKS FOR THE RECORD OF THE WORKSHOP
PAPERS PRESENTED AT THE WORKSHOP
Participants in the workshop were not required to prepare formal papers setting out their views. Nonetheless, some did so and have agreed for the papers to be posted here. The following papers are available:
- Balto, David A.: Reviving Competition in Healthcare Markets: The Use of Section 5 of the FTC Act.
- Creighton, Susan, and Thomas Krattenmaker: Some Thoughts About the Scope of Section 5.
- Foer, Albert A.: Section 5 as a Bridge Toward Convergence.
- Kovacic, Chairman William E.: Five Questions About Section 5.
- Lande, Robert H.: How to Have a Distinctive and Useful Antitrust Role for Section 5 of the FTC Act.
- Leary, Thomas B.: A Suggestion for the Revival of Section 5.
- Leary, Thomas B.: The Search for Consensus on the Revival of Section 5 (a response to the Creighton &
- Leibowitz, Commissioner Jon: “Tales from the Crypt” Episodes ’08 and ’09: The Return of Section 5.
- Page, William H.: The FTC’s Procedural Advantage in Discovering Concerted Action.
- Rosch, Commissioner J. Thomas: Welcoming Remarks.
- Salinger, Michael A.: Remarks.
The event is free and open to the public. All attendees will be required to display a current driver's license or other valid form of photo identification. The Conference Center is accessible to people with disabilities. If you need an accommodation related to a disability, please call Ossie Neal, (202) 326-2358.
Pre-registration for this workshop is not necessary, but is encouraged, so that we may better plan for the event.
To pre-register, email your name and affiliation to firstname.lastname@example.org.
NOTE: When you pre-register, we will collect your name, affiliation, and your email address. This information will be used to estimate how many people will attend. We may use your email address to contact you with information about the workshop.
FILING A COMMENT
The Commission invites interested persons to submit written comments on issues related to this workshop. Comments to inform discussion at the workshop must be received by September 17, 2008. All comments in response to the Federal Register Notice are due by October 17, 2008.
Comments should be captioned “Section 5 Workshop – Comment, Project No. P083900” and submitted according to the instructions below.
To File Electronically:
Follow the instructions and fill out the form at https://secure.commentworks.com/ftc-section5workshop
To File in Paper Form:
A comment filed in paper form should include the reference to “Section 5 Workshop – Comment, Project No. P083900” in both the text and on the envelope, and should be mailed or delivered to the following address:
Federal Trade Commission/Office of the Secretary
600 Pennsylvania Avenue, N.W.
Room H-135 (Annex C)
Washington, DC 20580
Because postal mail in the Washington area and at the Commission is subject to delay, please consider submitting your comments in electronic form, as described above. The FTC requests that you send any comment by courier or overnight service, if possible.
To Request Confidential Treatment:
To request confidential treatment, you must file in paper form and clearly label the first page of the document with “Confidential” and comply with Commission Rule 4.9(c). 15 C.F.R. § 4.9(c).
Under the Freedom of Information Act (“FOIA”) or other laws, we may be required to disclose to outside organizations the information you provide when you pre-register. The Commission will consider all timely and responsive public comments, whether filed in paper or electronic form, and as a matter of discretion, we make every effort to remove home contact information for individuals from the public comments before posting them on the FTC website.
FOR FURTHER INFORMATION CONTACT:
Office of Policy and Coordination,
Bureau of Competition,
600 Pennsylvania Avenue, N.W.,
Washington, D.C. 20580
or e-mail, Section5Workshop@ftc.gov