FTC’s Section 5 Policy Statement Effectively Declares Competition Illegal

The American economy and consumers benefit from healthy competition. In a new policy statement defining unfair methods of competition, however, the FTC is actually set on declaring it illegal for companies to compete in ways that help consumers. This statement, both breathtaking in scope and extreme in approach, will discourage healthy competition, damage U.S. competitiveness, and contribute to rising inflation. Congress and the courts need to rein in the FTC’s overreach. 

Why it matters: 
The FTC has effectively declared pro-consumer competition illegal. In the FTC’s view, the agency can deem any business conduct as “unfair” without any showing of harm to consumers, anticompetitive intent, market power, or market definition. As dissenting Commissioner Christine Wilson explains, “The Policy Statement adopts an ‘I know it when I see it’ approach premised on a list of nefarious-sounding adjectives, many of which have no antitrust or economic meaning.”  This leaves the FTC with carte blanche control over the economy, allowing it on a whim to decide whatever it feels might be unfair. 

Go deeper:​
The FTC seeks to bar a slew of common business practices that have long been viewed on a bipartisan basis as good for competition, good for consumers, good for lowering prices, and good for a healthy dynamic economy.   Further, the FTC now wants to suggest it has powers to review mergers in ways Congress and the courts have explicitly rejected under merger law. All of this is made possible, because the FTC no longer believes that the consumer is at the heart of the agency’s mission.  It is inconvenient for Chair Khan and her agenda to measure business practices up against harm to consumers.  Khan has convinced her fellow Democratic Commissioners that the solution is to ignore harm to consumers and by fiat label business practices a violation of the law whenever they feel so inclined.     

The bottom line: 
The FTC has asserted for itself unprecedented authority to micromanage the U.S. economy, untethered from history, law, or basic economics. Congress, the courts, and the entire business community must resist the agency’s massive overreach. If the FTC is allowed to implement this policy statement, consumers should expect higher prices, fewer choices, and less innovation. Such deep government intervention into our economy would have catastrophic consequences to free enterprise.  

About the authors

Sean Heather

Sean Heather is Senior Vice President for International Regulatory Affairs and Antitrust.

Read more