By Andrea Agathoklis Murino, Wilson Sonsini Goodrich & Rosati
In a speech last week, the Federal Trade Commission’s (FTC) newest Commissioner, Joshua D. Wright, provided an unusually candid and public exploration of his would-be agenda as a sitting Commissioner. Foremost among his to-do list is the issuance of a binding public “Unfair Methods Policy Statement,” that would specify both guiding and limiting principles the FTC would use in the application of Section 5 of the Federal Trade Commission Act. Section 5, though deceptively straight-forward in language, has a tortured history of enforcement and remains among the more muddled doctrines in United States competition law today. Commissioner Wright’s bold attempt to eliminate this uncertainty is assuredly the “Wright” call.
All seem to agree that Section 5 was established to reach conduct that could otherwise not be condemned under the Sherman or Clayton Acts. There is uniform consensus behind the history of the legislation that the FTC was designed to be a tribunal which could assess potential Section 5 violations using its accumulated and competition-specific expertise and knowledge in ways that a generalist adjudicator could not. Like so much in life, this was easier in theory than in practice. I certainly agree with Commissioner Wright that Section 5 enforcement has fallen short. You need look no further than the fact that not since the 1960s – over 50 years ago – is there a case where the FTC prevailed on a Section 5 appeal. Indeed, for most of the years since, Section 5 was barely used as it was intended at all.
Using deliberate and determined language, Commissioner Wright’s call-to-arms begins with the premise that there is an “unfortunate gap between the theoretical promise of Section 5 as articulated by Congress and its application in practice by the Commission.” He then moves on to explain that there is little hope for Section 5 application if the FTC cannot properly articulate its enforcement policy, and most importantly, that this Commission can “put an end to the state of affairs” by issuing a “policy statement articulating its views on the appropriate application of its signature statute in unfair methods of competition cases.” Continue reading