1 

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Dissenting Statement of Commissioner Christine S. Wilson

Regarding the “Policy Statement Regarding the Scope of Unfair Methods of Competition

Under Section 5 of the Federal Trade Commission Act” 

Commission File No. P221202 

November 10, 2022 

 In July 2021, the newly-minted majority at the Commission abruptly withdrew the 

bipartisan Statement of Enforcement Principles Regarding “Unfair Methods of Competition” 

Under the FTC Act (“2015 Statement”).0F

1

 The 2015 Statement had been adopted on a bipartisan 

basis by the Commission six years prior because it embodied a sound approach to antitrust law 

that reflected decades of legal precedent and economic learning. I dissented from the decision to 

rescind the 2015 Statement not only because it reflected a repudiation of the consumer welfare 

standard and the rule of reason, but also because withdrawing the 2015 Statement without 

issuing new guidance left businesses in the dark on how to structure their conduct to avoid a 

challenge by the Commission.1F

2

 Due process demands that the lines between lawful and unlawful 

conduct be drawn clearly;2F

3

 this interest is heightened when the enforcer at issue promises a new 

era of aggressive action.3F

4

Today, the Commission issues a Policy Statement Regarding the Scope of Unfair 

Methods of Competition Under Section 5 of the Federal Trade Commission Act (“Policy 

Statement”). Unfortunately, instead of providing meaningful guidance to businesses, the Policy 

1 See Statement of the Commission on the Withdrawal of the Statement of Enforcement Principles Regarding 

“Unfair Methods of Competition” Under Section 5 of the FTC Act (July 9, 2021), 

https://www.ftc.gov/system/files/documents/public_statements/1591706/p210100commnstmtwithdrawalsec5enforce

ment.pdf. 

2 See Noah Joshua Phillips & Christine S. Wilson, Comm’rs, Fed. Trade Comm’n, Dissenting Statement on the 

“Statement of the Commission on the Withdrawal of the Statement of Enforcement Principles Regarding ‘Unfair 

Methods of Competition’ Under Section 5 of the FTC Act” (July 9, 2021), 

https://www.ftc.gov/system/files/documents/public_statements/1591710/p210100phillipswilsondissentsec5enforcem

entprinciples.pdf. 

3 See Connally v. Gen’l Construction Co., 269 U.S. 385 (1926). 

4 See Lina M. Khan, Chair, Fed. Trade Comm’n, Memorandum to [Federal Trade] Commission Staff and 

Commissioners regarding Vision and Priorities for the FTC, (Sept. 22, 2021), 

https://www.ftc.gov/system/files/documents/public_statements/1596664/agency_priorities_memo_from_chair_lina_

m_khan_9-22-21.pdf
2 

Statement announces that the Commission has the authority summarily to condemn essentially 

any business conduct it finds distasteful. 

In the past, both the FTC and its sister agency, the Antitrust Division of the Department 

of Justice, have issued clear and constructive guidance on enforcement policies and practices.4F

5

 

The Policy Statement that the Commission issues today takes a very different approach. Instead 

of a law enforcement document, it resembles the work of an academic or a think tank fellow who 

dreams of banning unpopular conduct and remaking the economy. It does not reflect the thinking 

of litigators who know that legal precedent cannot be ignored, case-specific facts and evidence 

must be analyzed, and the potential for anticompetitive effects must be assessed. It does not 

reflect the approach of experienced policy makers who recognize the necessity of considering the 

business rationales for, and benefits of, conduct so that agency action does not harm consumers 

and the economy. And it does not exhibit the input of those with counseling and in-house 

experience who understand the need to provide workable rules so that “honest businesses”5F

6 can 

map the boundaries of lawful conduct. 

The Second Circuit explained that “the Commission owes a duty to define the conditions 

under which conduct . . . would be unfair so that businesses will have an inkling as to what they 

can lawfully do rather than be left in a state of complete unpredictability.”6F

7

 Instead of heeding 

this admonition, 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. It 

provides no methodology to explain which adjectives may apply in any given set of 

circumstances. The only crystal-clear aspect of the Policy Statement pertains to the process 

following invocation of an adjective: after labeling conduct “facially unfair,” the Commission 

plans to skip an in-depth examination of the conduct, its justifications, and its potential 

consequences. The instructions in the iconic Monopoly game provide an apt analogy: the 

respondent essentially will be told, “Go to jail. Go directly to jail. Do not pass go. Do not collect 

$200.”7F

8

 But these concerns are only the tip of the iceberg. As explained below in more detail, the 

Policy Statement affirmatively takes several steps with sweeping implications. 

5 Fed. Trade Comm’n & U.S. Dep’t of Just., Horizontal Merger Guidelines (Aug. 19, 2010), 

https://www.ftc.gov/sites/default/files/attachments/merger-review/100819hmg.pdf; Fed. Trade Comm’n & U.S. 

Dep’t of Just., Vertical Merger Guidelines (June 30, 2020), https://www.ftc.gov/system/files/documents/reports/usdepartment-justice-federal-trade-commission-vertical-mergerguidelines/vertical_merger_guidelines_6-30-20.pdf; 

Fed. Trade Comm’n & U.S. Dep’t of Just., antitrust Guidelines for International Enforcement and Cooperation (Jan. 

13, 2017), https://www.ftc.gov/system/files/documents/public_statements/1049863/

international_guidelines_2017.pdf; Fed. Trade Comm’n & U.S. Dep’t of Just., Statements of Antitrust Enforcement 

Policy in Health Care (Aug. 1996), https://www.ftc.gov/system/files/attachments/competition-policyguidance/statements_of_antitrust_enforcement_policy_in_health_care_august_1996.pdf. 

6 Memorandum from Chair Lina M. Khan to [Federal Trade] Commission Staff and Commissioners, supra note 4, at 

1.

7 E.I. du Pont de Nemours & Co. v. F.T.C., 729 F.2d 128, 139 (2d Cir. 1984) (“Ethyl”). 

8

 The analogy is imperfect, as the FTC does not have criminal authority. But I trust that the reader gets the point.
3 

• First, the Policy Statement abandons the rule of reason, which provides a structured 

analysis of both the harms and benefits of challenged conduct. The majority prefers a 

near-per se approach that discounts or ignores both the business rationales underlying 

challenged conduct and the potential efficiencies that the conduct may generate. 

• Second, the Policy Statement repudiates the consumer welfare standard and ignores the 

Supreme Court’s admonition that antitrust “protects competition, not competitors.”8F

9 The 

Commission will now seek to advance the welfare of inefficient competitors, “workers,” 

and other unnamed but politically favored groups – at the expense of consumers.

• Third, the Policy Statement rejects a vast body of relevant precedent that requires the 

agency to demonstrate a likelihood of anticompetitive effects, consider business 

justifications, and assess the potential for procompetitive effects before condemning 

conduct. 

In other words, the Policy Statement abandons bedrock principles of antitrust that long have been 

accepted by the Commission, the courts, the business community, and enforcers across the globe. 

 It is also necessary to consider what the Policy Statement does not do. 

• First, as noted in the preceding paragraphs, the Policy Statement does not provide clear

guidance to businesses seeking to comply with the law. 

• Second, the Policy Statement does not establish an approach for the term “unfair” in the 

competition context that matches the economic and analytical rigor that Commission 

policy offers for the same term, “unfair,” in the consumer protection context. 

• Third, the Policy Statement does not provide a framework that will result in credible 

enforcement. Instead, Commission actions will be subject to the vicissitudes of prevailing 

political winds.

• Fourth, the Policy Statement does not address the legislative history that both demands 

economic content for the term “unfair” and cautions against an expansive approach to 

enforcing Section 5. 

On a procedural note, I believe the Policy Statement should be issued for public comment 

rather than adopted as a final Commission policy at this time. Chair Khan announced a 

commitment to foster transparency and democratize the FTC.9F

10 Obtaining public input on the 

9 Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977) (quoting Brown Shoe Co. v. United 

States, 370 U.S. 294, 320 (1962) (the antitrust laws “were enacted for the protection of competition, not 

competitors”)). 

10 See Prepared Statement of the Federal Trade Commission Before the United States Senate Committee on the 

Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, “Oversight of the Enforcement of 

the Antitrust Laws” 14-15 (Sept. 20, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/

P210100SenateAntitrustTestimony09202022.pdf, (describing FTC efforts to prioritize public participation); 
4

new Policy Statement would be consistent with that commitment. The majority likely will point 

out that when the now-rescinded 2015 Statement was issued, the Commission did not solicit 

public comment. But there are significant differences between the 2015 Statement and today’s 

Policy Statement that warrant a different procedure. The 2015 Statement described the 

enforcement approach that the Commission had followed for many decades; it was consistent 

with long-standing Commission practice, as well as legal precedent and economic learning. In 

contrast, the Policy Statement announced today represents a radical departure from the 

Commission’s recent enforcement efforts, and a dramatic expansion of the agency’s purported 

authority. Given these circumstances, hearing from the public is essential.

Below, I first explain the enforcement approach laid out in the Policy Statement. I then 

elaborate on my concerns about the affirmative steps that the Policy Statement takes. I close with 

a discussion of the four tasks the Policy Statement does not accomplish. 

For all of these reasons, I dissent.

I. The Policy Statement’s Framework

The Policy Statement establishes a framework to identify unfair methods of competition 

under Section 5 of the FTC Act. First, under the Policy Statement, conduct must be “a method of 

competition,” defined as conduct by a marketplace actor that implicates competition, even if only 

indirectly. Second, the method of competition must be “unfair,” defined as going beyond 

competition on the merits. 

To determine whether the method of competition is “unfair,” the Policy Statement 

provides two relevant criteria. Under the first criterion, conduct may be “coercive, exploitive, 

collusive, abusive, deceptive, predatory, or involve the use of economic power of a similar 

nature,” or “otherwise restrictive or exclusionary.”10F

11 Under the second criterion, “the conduct 

must tend to negatively affect competition conditions” by “affecting consumers, workers or other 

market participants.”11F

12 These two criteria are weighed using a sliding scale. When conduct is 

labeled “facially unfair” pursuant to the first criterion, the second criterion is rendered essentially 

irrelevant. If conduct is not labeled “facially unfair,” pursuant to the second criterion, the 

conduct must be shown to have a “tendency to negatively affect market conditions.”

But the Policy Statement explains how little is needed to satisfy the second criterion; in 

fact, it expressly rules out what must be shown. There need be no showing of actual effects; it is 

enough to assert that there is a “tendency” for the conduct to generate negative consequences.12F

13

Also, that “tendency” need not be attributable to the particular conduct at issue, or even the 

conduct of the particular market actor under investigation; the tendency for negative 

“consequences may arise when the conduct is examined in the aggregate along with the conduct 

Memorandum from Chair Lina M. Khan to [Federal Trade] Commission Staff and Commissioners, supra note 4, at 

2.

11 Policy Statement at 9.

12 Id.

13 Id. at 10.
5

of others . . ., or when the conduct is examined as a part of the cumulative effect of a variety of 

different conduct by the respondent.”13F

14 Finally, it is unnecessary to show market power,14F15 a 

common tool in antitrust cases to predict or infer likely effects from conduct. 

After a prima facie case has been established, the respondent has little recourse.15F

16 Under 

the Policy Statement, the Commission will not employ a rule of reason analysis,16F

17 which 

provides a well-defined framework to analyze competitive impact. A respondent can assert a 

justification for the conduct but, according to the Policy Statement, the Commission’s “inquiry 

would not be a net efficiencies test or a numerical cost benefit analysis”17F

18 and “the more facially 

unfair or injurious the harm, the less likely it is to be overcome by a countervailing justification 

of any kind.”18F

19 For a respondent to be heard, the justification must show that the benefits of the 

conduct redound to market participants other than the respondent,19F

20 those benefits must be in the 

same market where the harm occurs20F

21 (even though market definition is unnecessary to find 

competitive harm21F

22), and the respondent has the “burden to show that the asserted justification 

for the conduct is legally cognizable, that it is nonpretextual, and that any restriction used to 

bring about the benefit is narrowly tailored to limit any impact on competitive conditions.”22F

23

II. The Policy Statement Rejects Longstanding Antitrust Policies and Legal Precedent, 

Instead Embracing an Unstructured “I Know It When I See It” Approach

A. The Policy Statement Replaces the Rule of Reason With an Open-Ended and 

Near-Per Se Approach 

The Policy Statement abandons the structured analysis of the rule of reason because, it 

asserts, Section 5 has “distinctive goals” and was enacted to overcome concerns in 1914 about 

the application of the rule of reason.23F

24 When it withdrew the 2015 Statement, the Commission 

majority explained that the rule of reason “hamstrings [the FTC’s] enforcement mission with an 

approach that poses significant administrability concerns” because courts assess whether 

14 Id.

15 Id.

16 Id. at 10 (When “conduct prima facie constitutes an unfair method of competition, liability normally ensues under 

Section 5 absent additional evidence.”).

17 Id. at 10 (“Given the distinctive goals of Section 5, the inquiry will not focus on the ‘rule of reason’ inquiries 

more common in cases under the Sherman Act”).

18 Id. at 11.

19 Id.

20 Id.

21 Id. at 12.

22 Id. at 10.

23 Id. at 11-12.

24 Id. at 10.
6

procompetitive effects outweigh anticompetitive harm.24F

25 Put plainly, too many practices can be 

justified by legitimate business rationales and procompetitive effects. But, as described below, 

the rule of reason played a role in Section 5’s legislative history and benefits sound enforcement 

by providing a structured framework for examining challenged conduct.25F

26 Moreover, contrary to 

the concerns expressed by the Commission majority, most rule of reason cases are decided at the 

early stages of the analysis, sparing the court the need to balance procompetitive benefits against 

anticompetitive effects.26F

27

Eschewing the structured approach of the rule of reason, the Policy Statement instead 

adopts an open-ended inquiry. Under the new framework, the Commission will consider the 

effects of conduct on consumers, labor, competitive rivals, and unnamed others. The Policy 

Statement provides no content for the list of adjectives that may signal the presence of “unfair” 

methods of competition. There is no methodology for the adjective-labeling exercise. Ultimately, 

there is no meaningful guidance for courts and businesses to analyze unfair methods of 

competition. 

The Policy Statement not only abandons the rule of reason, it applies a quick look 

analysis that approximates per se condemnation. Specifically, the Policy Statement advances a 

framework that condemns conduct with little showing necessary to establish a prima facie case 

while also ruling out meaningful consideration of efficiencies and other benefits or justifications. 

This approach is inconsistent with antitrust principles. Per se rules are reserved for conduct that 

is so inherently and commonly understood to be unreasonable that courts dispense with a rule of 

reason analysis.27F

28 Although courts have eliminated the dichotomy between per se and rule of 

reason analysis, and endorsed abbreviated analysis,28F

29 courts have not summarily condemned 

conduct without considering likely competitive effects in some manner. As the Commission has 

explained, an abbreviated analysis is reserved for conduct that is “inherently suspect owing to its 

likely tendency to suppress competition. Such conduct ordinarily encompasses behavior that past 

judicial experience and current economic learning have shown to warrant summary 

condemnation.”29F

30

Prudential concerns abound. Summary condemnation should require experience; 

academic learning, empirical insights, and judicial experience should be demanded. Here, 

however, the Policy Statement provides that merely labeling conduct with an appropriate 

adjective can establish liability. Even when conduct is found to be unfair based on a tendency for 

25 Statement of the Commission on the Withdrawal of the Statement of Enforcement Principles Regarding “Unfair 

Methods of Competition” Under Section 5 of the FTC Act 5, supra note 1.

26 See Ohio v. American Express Co., 138 S. Ct. 2274, 2284 (2018). The plaintiff has the initial burden of proving 

that conduct has had or is likely to have a substantial adverse effect on competition. If this burden is met, the burden 

shifts to the defendant to produce evidence of procompetitive benefits. If there is such evidence, the plaintiff must 

show that the conduct is not reasonably necessary to achieve the objective or that the anticompetitive effects 

outweigh the benefits. Id.

27 See Michael A. Carrier, The Rule of Reason: Bridging the Disconnect, 1999 BYU L. Rev. 1265, 1364 (1999).

28 See, e.g., Northern Pac. Ry. Co. v. United States, 356 U.S. 1 (1958).

29 See, e.g., California Dental Ass’n v. Fed. Trade Comm’n, 526 U.S. 756 (1999).

30 Polygram Holding, Inc., 136 F.T.C. 310, 344-45 (2003).
7 

anticompetitive effects, the Policy Statement is silent regarding whether accepted scholarly 

support or judicial experience must undergird the claim that there is a tendency for harm (after 

all, actual harm need not be shown). In fact, the concern is greater because the Policy Statement 

expressly states that it is willing to disregard judicial experience.30F

31 In other words, under the 

Policy Statement, the Commission majority will challenge as “unfair methods of competition” 

practices that courts previously, and repeatedly, have found to be legal. In these cases, the 

Commission’s invocation of nefarious-sounding adjectives and conclusory assertions of a 

“tendency” for harm will trump sometimes substantial judicial experience regarding the 

likelihood of competitive harm.

The unbounded application of Section 5 that is heralded by the Policy Statement is 

inconsistent with the Commission’s authority to impose a broad set of remedies. The Policy 

Statement discusses the balance struck by Congress in the FTC Act: namely, while the FTC Act 

enables the Commission to challenge a broader range of conduct than that covered by the 

Sherman and Clayton Acts, it did not create a private right of action and it limited the preclusive 

effect of FTC enforcement in private antitrust cases.31F

32 In fact, the bargain went further than the 

Policy Statement acknowledges; Commission remedies were limited to cease-and-desist orders 

in exchange for the ability to challenge this broader range of conduct. It is appropriate to attach 

severe remedies to well-defined prohibitions, and less severe remedies to more amorphous 

prohibitions. But it is inappropriate to couple a broad range of remedies with the authority to 

challenge a broad (and nebulously defined) universe of conduct. For this reason, I have explained 

that any Congressional response to the Supreme Court’s decision in AMG32F

33 must include 

guardrails to limit the range of conduct subject to disgorgement or restitution.33F

34 

B. The Policy Statement Rejects the Consumer Welfare Standard to Protect and 

Reward Politically Favored Groups 

The Policy Statement abandons the long- and widely-accepted consumer welfare standard 

and instead adopts a standard that seeks to pursue multiple goals. Enforcement decisions are not 

predictable in a regime that seeks to advance many goals, including potentially conflicting ones, 

simultaneously.34F

35 Under the consumer welfare standard, enforcers and businesses understood 

31 Policy Statement at 13-14 (explaining that Commission’s analysis regarding liability “may depart from prior 

precedent based on the provisions of the Sherman and Clayton Acts” and identifying conduct that is not currently 

illegal under the antitrust laws that will be subject to challenge as unfair methods of competition as violations of “the 

spirit of the antitrust laws”).

32 Policy Statement at 5.

33 AMG Cap. Mgmt, LLC v. FTC, 141 S. Ct. 1341 (2021).

34 For instance, the limitations on the use of monetary equitable remedies in competition cases provided by the 

Commission’s 2003 Policy Statement are appropriate. See Policy Statement on Monetary Equitable Remedies in 

Competition Cases, 68 Fed. Reg. 45,820 (Aug. 4, 2003), 

https://www.ftc.gov/system/files/documents/public_statements/410451/030804policystatementequitable.pdf. 

35 See Christine S. Wilson, Thomas J. Klotz & Jeremy A. Sandford, Recalibrating the Dialogue on Welfare 

Standards: Reinserting the Total Welfare Standard into the Debate, 26 Geo. Mason L. Rev. 1435, 1454 (2019) (“if 

the list of goals and the weights assigned to each is indeterminate, then firms contemplating particular conduct will 

not be able to predict reliably whether antitrust enforcement is likely in a particular case. . . . The indeterminacy of 
8 

that there was one goal – enforcement protected consumers – and the analysis followed accepted 

economic theory and principles. The Policy Statement emphasizes that when it enacted Section 

5, “Congress wanted to give the Commission flexibility to adapt to changing circumstances.”35F

36

Ironically, the very tools that the Policy Statement rejects, the consumer welfare standard and the 

rule of reason, facilitate a flexible approach to assessing conduct that adapts to changing markets, 

emerging technologies, new business models, and evolving economic analysis – while still 

providing clarity and consistency in enforcement. 

In contrast, the Policy Statement establishes a model that will provide neither clarity nor 

consistency in enforcement. Conduct may be challenged as an unfair method of competition if it 

might negatively impact consumers, workers, competitors, and other market participants. No 

clarity is provided regarding which other market participants may be considered, or how this 

array of interests will be prioritized or balanced. And it is mathematically impossible to 

maximize more than one value, so the pursuit of one goal will require tradeoffs that adversely 

impact other competing interests. Oddly, the Commission majority claims that the rule of reason 

is not administrable because it requires balancing, but the approach embodied in the Policy 

Statement is far worse. It requires balancing among multiple goals without identifying the 

complete array of special interests to be protected, or the weights to be assigned to any of them. 

In short, the lack of identified priorities and rules for balancing interests means that enforcement 

will be subject to the whims and political agendas of sitting Commissioners.36F

37 But this outcome 

is consistent with Chair Khan’s assertion that all enforcement decisions are political.37F

38

 Equally important, the Policy Statement’s abandonment of the consumer welfare standard 

demonstrates that the Commission majority will support higher prices for consumers so that it 

may protect or reward political favorites. The consumer welfare standard protects consumers, 

resulting in lower prices, higher quality, and more innovation.38F

39 Efforts to protect other groups, 

including inefficient rivals and labor, necessarily will require tradeoffs that will harm consumers. 

Simply put, it is impossible to serve two masters. Protecting inefficient firms or labor will be 

“broadly redistributive, although consumers are not the beneficiaries. Rather the benefits flow to 

smaller firms or those that are wed to older technologies that have been displaced or threatened 

the goals and weights inherent in a multiple goals standard would make antitrust enforcement more susceptible to 

political whims and influence.”).

36 Policy Statement at 3.

37 1 PHILLIP AREEDA & DONALD TURNER, ANTITRUST LAW 25 (1978) (antitrust enforcement that seeks to pursue 

conflicting interests “would involve courts in essentially political decision-making for which there are no 

appropriate legal criteria and in a regulatory, supervisory role for which they are ill-suited.”)

38 Fox Business Networks, Break Up Amazon as a Monopoly?, YOUTUBE (June 23, 2017), 

https://youtu.be/VI_DEYqWxqs (Varney asks Lina Khan at the 2:33 mark: “To go after Amazon would be a 

political decision. Not a market decision. Not an economic decision. A politician would have to instigate this.” Khan 

replies, “I think all decisions are political in so far as government agencies are bringing them.”).

39 Herbert Hovenkamp, Is Antitrust’s Consumer Welfare Principle Imperiled, 45 J. Corp. L. 101, 103 (2019) 

(“Antitrust’s consumer welfare principle is best regarded as taking a ‘middle man’ approach to markets, reacting 

aggressively to unambiguous harms . . . and more circumspectively to single-firm conduct or other practices that 

have a significant potential to benefit consumers. The overall goal is clear, however, which is to encourage markets 

in which output, measured by quantity, quality, or innovation, is as large as possible consistent with sustainable 

competition.”).
9

by newer ones[.]”39F

40 American consumers are unlikely to support antitrust enforcement that 

chooses to eliminate low prices, whether in the interest of protecting small businesses that wish 

to charge higher prices or to protect jobs at firms that are acknowledged to be inefficient.

The Policy Statement does not justify the rejection of the consumer welfare standard with 

references to existing case law. Like the enforcement decisions that will flow from this Policy 

Statement, it is a political decision. 

C. The Policy Statement Rejects Precedent

Although the adjectives that the Policy Statement uses to signal the existence of “unfair 

methods of competition” can be found in cases, it is worth noting that those adjectives generally 

do not provide the basis for the holdings in those cases.40F

41 Instead, courts indicate that the 

conduct at issue is not described by those adjectives; courts then proceed to examine evidence of 

anticompetitive effects and procompetitive justifications for the challenged conduct. In other 

words, modern cases are diametrically opposed to the approach adopted by the Policy Statement; 

they reject labels and instead look to the evidence to consider liability. Moreover, even the old 

cases cited by the Policy Statement do not adopt the array of shortcuts in the Policy Statement, 

including foregoing the need to show anticompetitive harm and ignoring the role of 

procompetitive justifications. A fair reading of the cases reveals that the approach of the Policy 

Statement is inconsistent with the law.

1. The Policy Statement Ignores Precedent Regarding the Need to 

Demonstrate Anticompetitive Effects

When enforcement of Section 5 would require a showing of anticompetitive effects under 

the second criterion because the conduct is not facially unfair, the Policy Statement minimizes 

the necessary showing. The Policy Statement asserts that Section 5 “analysis is purposely 

focused on incipient threats to competitive conditions” and focuses the analysis on “whether the 

respondent’s conduct has a tendency to generate negative consequences.”41F

42 It further claims that 

it is unnecessary to prove actual harm, market power, or market definition,42F

43 but admits that the 

“size, power, and purpose of the respondent may be relevant.”43F

44 As a consequence, the Policy 

Statement discounts the showing of anticompetitive effects required to allege a law violation. 

In support of this claim that only a limited showing is necessary, the Policy Statement 

and Explanatory Guide point only to the legislative history and the Commission’s 1941 case 

40 Id. at 117.

41 See E.I. du Pont de Nemours & Co. v. FTC, 729 F.2d at 140 (“in the absence of proof of a violation of the 

antitrust laws or evidence of collusive, coercive, predatory, or exclusionary conduct, business practices are not 

‘unfair’ in violation of § 5 unless those practices either have an anticompetitive purpose or cannot be supported by 

an independent legitimate reason” and finding “no evidence of coercive or predatory conduct.”).

42 Policy Statement at 9-10.

43 Id. at 10

44 Id.
10

against the Fashion Originators Guild of America.44F

45 But in Fashion Originators Guild of 

America v. FTC, the Supreme Court determined that the Commission found that there was 

market power and that the challenged conduct excluded manufacturers and distributors, which 

“tend[ed] to create . . . a monopoly in the said industries.”45F

46 In short, the Court determined that 

the Commission found evidence of anticompetitive effects.

The Policy Statement also ignores the showing of competitive effects demanded by later 

cases. In Boise Cascade Corp. v. FTC,46F

47 the Ninth Circuit found that a Section 5 violation was 

not supported by substantial evidence when “the Commission . . . provided [the court] with little 

more than a theory of the likely effect of the challenged . . . practices.47F

48 The Ninth Circuit found 

that “[t]here is a complete absence of meaningful evidence in the record that price levels . . . 

reflect an anticompetitive effect”48F

49 and data on costs and profits were not informative because 

they were “largely a deduction from the Commission’s reasoning about the tendencies of the 

challenged practice.”49F

50 Despite the Commission’s argument that a greater showing was not 

required because Section 5 addressed incipient conduct, the court concluded, “where there is a 

complete absence of evidence implying overt conspiracy, to allow a finding of a [S]ection 5 

violation on the theory that the mere widespread use of the practice makes it an incipient threat 

to competition would be to blur the distinction between guilty and innocent commercial 

behavior.”50F

51

The decision in Boise Cascade is not an anomaly. The Commission enforces Section 7 of 

the Clayton Act, which employs an incipiency standard for merger enforcement.51F

52 While courts 

generally do not require proof of actual effects for unconsummated mergers, courts expect 

evidence of likely anticompetitive effects, perhaps shown by evidence of market power and 

market definition.52F

53 The Commission’s experience challenging anticompetitive mergers counsels 

against the discounted showing of likely competitive effects that the Policy Statement envisions.

45 Fashion Originators’ Guild of America, Inc. v. FTC, 312 U.S. 457 (1941).

46 Id. at 466-67.

47 Boise Cascade Corp. v. FTC, 637 F.2d 573 (9th Cir. 1980).

48 Id. at 578.

49 Id. at 579.

50 Id. at 580.

51 Id. at 582.

52 The Policy Statement asserts that Section 5 enables the Commission to challenge incipient violations of the 

antitrust laws. Incipient violations of Section 7 of the Clayton Act would constitute an incipient violation of an 

incipiency standard, which is nonsensical. Unfortunately, the Policy Statement indicates that the Commission will 

use Section 5 to challenge mergers and acquisitions that do not violate the antitrust laws.

53 See, e.g., FTC v. Thomas Jefferson Univ., 505 F.Supp.3d 522, 528 (E.D. Pa 2020) (“To establish its prima facie 

case, the Government must put forth enough evidence to prove that the insurers would not avoid a price increase in 

any one of the government’s proposed markets by looking to hospitals outside those markets. The government has 

not met this burden.”); FTC v. RAG-Stiftung, 436 F.Supp.3d 278, 287 (D.D.C. 2020) (“the FTC has not made out its 

prima facie case, which requires it to show undue concentration for a particular product in a particular geographic 

area, and it has not otherwise shown a likelihood that the proposed . . . merger will substantially harm 

competition.”).
11 

Also, the Policy Statement’s position that incipiency allegations negate a need to 

demonstrate likely anticompetitive effects is inconsistent with Commission opinion. The 

Commission expressly refused to rely on an incipiency standard for its findings about 

competitive effects in General Foods Corp.53F

54 The Commission rejected the argument that 

Section 5 could prohibit conduct by a firm with market power even when there was no dangerous 

probability that the firm could obtain monopoly power.54F

55 In short, the Commission found that 

the showing of likely anticompetitive effect required under Section 5 is no lower than the 

showing required to prove allegations of attempted monopolization under the Sherman Act. 

2. The Policy Statement Ignores Precedent Requiring Consideration of 

Business Justifications

The Policy Statement hedges on whether business justifications for conduct will be 

considered.55F

56 It points to language from cases decided in the 1960s and early 1970s to suggest 

there is no role for business justifications in the analysis of unfair methods of competition. This 

language is inconsistent with subsequent cases and modern analysis. In all recent cases, 

justifications – even if rejected – were considered; the Commission and courts do not 

affirmatively choose to ignore relevant evidence.56F

57 In fact, courts expressly have identified 

business justifications as part of the test for unfair methods of competition. 57F

58 For instance, the 

Second Circuit in Ethyl summarized its test, “in the absence of proof of a violation of the 

antitrust laws or evidence of collusive, coercive, predatory, or exclusionary conduct, business 

practices are not ‘unfair’ in violation of § 5 unless those practices either have an anticompetitive 

purpose or cannot be supported by an independent legitimate reason.”58F

59

54 General Foods Corp., 103 F.T.C. 204 (1984).

55 Id. at 365-66 (“To distinguish between an attempt to monopolize and an incipient attempt on the basis of potential 

market power is to engage in such fine distinctions as to challenge the legal philosopher, let alone the competitor 

trying to conform its conduct to the law. If the conduct at issue here cannot reach the early threshold of doubt under 

the Sherman Act, we will not condemn it under the FTC Act.”). 

56 Policy Statement at 10 (“There is limited caselaw on what, if any, justifications may be cognizable in a standalone 

Section 5 unfair methods of competition case.) (emphasis added).

57 See, e.g., Valassis Communications, Inc., File No. 051-0008, complaint at ¶14 (2006), https://www.ftc.gov/sites/

default/files/documents/cases/2006/04/0510008c4160valassiscomplaint.pdf; Intel Corp., File No. 061-0247, 

complaint at ¶¶ 91, 96 (2010), https://www.ftc.gov/sites/default/files/documents/cases/091216intelcmpt.pdf; Boise 

Cascade Corp. v. FTC, 637 F.2d 573, 580-81 (9th Cir. 1980 (conduct explained by “common-sense proposition” 

regarding pricing practice as a “natural competitive response to buyer preference”); Official Airlines Guides, Inc. v. 

FTC, 630 F.2d 920, 923 (2d Cir. 1980) (Commission reversed ALJ on 2 counts, “holding that [respondent] had 

sufficient business justification for” challenged conduct).

58 Consequently, despite any instruction from the Commission in the Policy Statement, courts will consider business 

justifications.

59 E.I. du Pont de Nemours & Co. v. FTC, 729 F.2d at 140. See also id. at 139 (noting that “before business conduct 

in an oligopolistic industry may be labelled ‘unfair’ within the meaning of § 5 a minimum standard demands that, 

absent a tacit agreement, at least some indicia of oppressiveness must exist such as (1) evidence of anticompetitive 

intent or purpose on the part of the producer charged, or (2) the absence of an independent legitimate business 

reason for its conduct. and finding, on the facts of the case that “the evidence is overwhelming and undisputed . . . 

that each petitioner independently adopted its practices for legitimate business reasons.”).
12

Precedent establishes that conduct may not be labelled “unfair” without considering 

whether there is an absence of a business justification; that is, a business justification is not 

considered only to be a defense. Even cases cited by the Policy Statement do not suggest that 

conduct may be declared unfair without considering the legitimate business justifications.

Atlantic Refining Co. v. FTC only acknowledged the unremarkable principle that defendants may 

not justify anticompetitive conduct by showing “economic benefit to themselves.”59F

60 In Fashion 

Originators Guild of America v. FTC, the Court held that the FTC did not need to consider 

justifications in light of the egregious facts of that case where the guild had “aim[ed]” for the 

“intentional destruction of one type of manufacture and sale which competed with Guild 

members.”60F

61

In addition, there are important reasons to consider business justifications for conduct. 

Business rationales for undertaking challenged practices not only provide context for those 

choices, but also illuminate the likely competitive effects of the practices at issue. Particularly 

when the Commission is examining conduct in its incipiency – in other words, before 

competitive outcomes are known – business explanations and justifications for the practices at 

issue constitute important predictors of the likely outcomes. As the Supreme Court and the 

Commission have explained in numerous opinions, while intent generally does not constitute an 

element of most antitrust violations, it is informative concerning the likely effects on the 

market.61F

62

Finally, in Section 5 of the FTC Act, the Commission is instructed to bring cases only 

when they are in the public interest.62F

63 Consequently, it is essential that the Commission consider 

the business justification, potential efficiencies, and other procompetitive outcomes of the 

challenged conduct. The Policy Statement’s position that the Commission will not consider 

whether conduct yields net benefits means the Commission likely will challenge conduct that is 

beneficial to consumers and the U.S. economy, merely to protect the interests of politically

favored groups. That approach is inconsistent with the FTC Act, as well as with principles of 

good government.

60 Atlantic Refining Co. v. FTC, 381 U.S. 357, 371 (1965).

61 Fashion Originators’ Guild of Am. v. FTC, 312 U.S.at 467-68.

62 Chicago Board of Trade v. United States, 246 U.S. 231, 238 (1918) (J. Brandeis) (“the history of the restraint, the 

evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all 

relevant facts. This is not because a good intention will save an otherwise objectionable regulation or the reverse; 

but because knowledge of intent may help the court interpret facts and to predict consequences.”); In re McWane, 

Inc. 157 F.T.C. 108, 144 n.11 (2014) (quoting United States v. Microsoft, 253 F.3d 34, 59 (D.D.C. 2001) (“while 

our aim is to ascertain the effect of McWane’s [conduct], evidence of McWane’s intent is relevant ‘to the extent it 

helps us understand the likely effect of [McWane’s] conduct.’”).

63 15 U.S.C. § 45(b) (“Whenever the Commission shall have reason to believe that any such person, partnership, or 

corporation has been or is using any unfair method of competition . . . in or affecting commerce, and if it shall 

appear to the Commission that a proceeding by it in respect thereof would be to the interest of the public, . . .”).
13

III. The Policy Statement Fails to Provide a Predictable, Credible Enforcement 

Approach for Unfair Methods of Competition

A. The Policy Statement Does Not Provide Guidance to Businesses That Seek to 

Comply with the Law

The framework described by the Policy Statement cannot be turned into workable rules 

for businesses. The list of adjectives that may be invoked to establish facially unfair competition

is lengthy, and includes “coercive,” “exploitive,” “collusive,” “abusive,” “deceptive,”

“predatory,” “restrictive,” and “exclusionary”.63F

64 These labels require subjective interpretation, 

and frequently lack established antitrust or economic meanings. But the Policy Statement does 

not provide content to the adjectives. Consequently, identifying whether conduct falls under one 

of the labels depends on the whims and political worldviews of three sitting Commissioners. As 

the composition of the Commission changes, so too will the application of Section 5. The 

subjective nature of the labeling process to determine liability means that it is not possible for 

businesses to know in advance whether their conduct will be considered unfair. In other words, 

the approach articulated in the Policy Statement does not allow businesses to structure their 

conduct to avoid possible liability.

Not only does the Policy Statement withhold meaningful guidance, it significantly 

increases uncertainty for businesses. When the Commission decides that particular conduct

“tends to cause potential harm similar to an antitrust violation” – despite contrary precedent – the 

Policy Statement provides that the “analysis may depart from prior precedent based on” the 

antitrust laws.64F

65 In other words, conduct that courts repeatedly have refused to condemn may 

now be subject to summary condemnation under the Commission’s open-ended approach. Newly 

condemned conduct may include tacit coordination; parallel conduct; price discrimination not 

covered by the Robinson-Patman Act; de facto tying, bundling, exclusive dealing, and loyalty 

rebates; mergers that do not violate the Clayton Act; and interlocking directorates not covered by 

the Clayton Act. 65F

66 Which precedent will be embraced, and which precedent will be rejected, is 

unclear, and will vary depending on the composition of the Commission. Businesses are left with 

no navigational tools to map the boundaries of lawful and unlawful conduct. 

Also, as previously described, the Policy Statement rejects the consumer welfare standard 

in favor of pursuing multiple (and sometimes competing) goals. When enforcement decisions

may be premised on the furtherance of many and sometimes conflicting interests, and no 

guidance is provided regarding how those potential goals will be balanced, enforcement 

outcomes will be unpredictable. Businesses cannot know how to structure their conduct when 

they do not know which interest(s) will drive a Commission decision in any particular 

circumstance.

64 Policy Statement at 9.

65 Policy Statement at 13.

66 See id. at 13-15.
14

Courts have been unwilling to find violations of Section 5 beyond the limits of the 

Sherman, Clayton, and Robinson-Patman Acts66F

67 when the Commission’s theory of liability 

cannot be turned into workable rules or standards that can guide the conduct of businesses. In 

Ethyl,67F

68 the Second Circuit explained that when conduct “does not violate the antitrust or other 

laws and is not collusive, coercive, predatory or exclusionary in character, standards for 

determining whether it is ‘unfair’ within the meaning of § 5 must be formulated to discriminate 

between normally acceptable business behavior and conduct that is unreasonable or 

unacceptable. Otherwise the door would be open to arbitrary or capricious administration of § 

5[.]”68F

69 Consequently, the Second Circuit explained that “the Commission owes a duty to define 

the conditions under which conduct . . . would be unfair so that businesses will have an inkling 

as to what they can lawfully do rather than be left in a state of complete unpredictability.”69F

70

Accordingly, the court explained that “[r]eview by the courts was essential to assure that the 

Commission would not act arbitrarily or without explication but according to definable standards 

that would be properly applied.”70F

71 Sadly, today’s Policy Statement does not offer definable 

standards.

Similarly, in Official Airlines Guides, Inc. v. FTC, the Second Circuit recognized the 

practical difficulty of applying the Commission’s expansive theory of liability in that case and 

refused to endorse an FTC order challenging an alleged monopolist’s conduct. The Second 

Circuit explained that “enforcement of the FTC’s order . . . would give the FTC too much power 

to substitute its own business judgment for that of the monopolist in any decision that arguably 

affects competition in another industry. Such a decision would permit the FTC to delve into . . . 

‘social, political, or personal reasons’ for a monopolist’s” conduct.71F

72 In explaining its decision, 

the appeals court said it was “weighing benefits to competition in the other field [where the firm 

did not operate] against the detrimental effect of allowing the Commission to pass judgment on 

many business decisions of the monopolist that arguably discriminate among customers in some 

way.”72F

73 The concerns of the Second Circuit are magnified under the Policy Statement. In 

Official Airlines Guides, the respondent was arguably a monopolist. In contrast, the Policy 

Statement’s approach will be applied to all businesses regardless of market status, because the 

emphasis is on foreclosing growth and evidence of market power is unnecessary.

Despite this concern by courts that firms be given “an inkling as to what they can 

lawfully do rather than be left in a state of complete unpredictability,” the Policy Statement

67 It is striking that the Policy Statement proposes to use Section 5 as a gap-filler for the much-maligned RobinsonPatman Act. Not satisfied with resuscitating Robinson-Patman enforcement, the majority now seeks to expand the

scope of that law beyond Congressional intent.

68 E.I. du Pont de Nemours & Co. v. F.T.C., 729 F.2d 128 (2d Cir. 1984).

69 Id. at 138.

70 Id. at 139.

71 Id. at 136.

72 Official Airlines Guides, Inc. v. FTC, 630 F.2d 920, 927 (2d Cir. 1980).

73 Id. (explaining that the FTC’s theory of liability would enable the FTC to require a supermarket that was the only 

grocery in town to stock a particular brand of frozen vegetables if the Commission found that brand had been 

competitively disadvantaged when the supermarket chose to stock a different brand).
15 

provides a subjective inquiry that leaves businesses in the dark. In fact, the Policy Statement 

utterly fails to deliver on its promise that it will “assist the public, business community, and 

antitrust practitioners by laying out the key general principles that apply to whether business 

practices constitute unfair methods of competition under Section 5 of the FTC Act.”73F

74

B. The Policy Statement Fails to Provide the Rigor Demonstrated by the 

Approach to the Term “Unfair” for Challenging Unfair and Deceptive Acts 

and Practices Under Section 5 of the FTC Act

The term “unfair” appears in Section 5 more than once; Section 5 also prohibits “unfair 

and deceptive acts and practices”74F

75 to address consumer protection issues. The Commission’s 

current interpretation of “unfair” in its consumer protection mission has been lauded for its 

flexibility to address a myriad of harmful practices while still providing businesses clarity and 

certainty about the boundaries of lawful conduct. The Policy Statement does not offer that level 

of rigor and clarity regarding unfair methods of competition. 

Consider the intentional approach to defining the boundaries of unfairness for consumer 

protection purposes under Section 5, and contrast it with today’s Policy Statement. Before the 

current interpretation of “unfairness” for consumer protection issues was adopted, the 

Commission interpreted “unfair” to have few restraints, and Congress responded. Before 1980, 

the Commission attempted to condemn a wide variety of conduct by asserting that a practice was 

unfair – as a consumer protection offense – when it offended public policy.75F

76 The Commission 

engaged in numerous rulemaking efforts in the 1970s in which it relied on public policy as a 

substitute for analysis and evidence.76F

77 This rulemaking crusade nearly led to the demise of the 

agency. 77F

78 The misuse of unfairness drove Congress to shut down the agency for several days, 

decline to reauthorize the agency for fourteen years, and pass the Federal Trade Commission 

Improvements Act of 1980, which imposed additional procedural obligations on trade regulation 

74 Policy Statement at 2.

75 15 U.S.C. § 45, as amended by the Wheeler-Lea amendment, 52 Stat. 111 (1938).

76 A footnote in FTC v. Sperry & Hutchinson Co., appeared to adopt the Commission’s articulation of unfairness 

from the Statement of Basis and Purpose for Unfair or Deceptive Advertising and Labeling of Cigarettes in Relation 

to the Health Hazards of Smoking Trade Regulation Rule. The rule posed three factors the Commission considers 

when determining whether a practice that neither violates the antitrust laws nor is deceptive is nonetheless unfair: 

“(1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as 

it has been established by statutes, the common law, or otherwise—whether, in other words, it is within at least the 

penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, 

unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers (or competitors or other 

businessmen).” 405 U.S. 233, 244 n.5 (1972).

77 See TIMOTHY J. MURIS & HOWARD BEALES, III, THE LIMITS OF UNFAIRNESS UNDER THE FEDERAL TRADE 

COMMISSION ACT 13 (1991). 

78 The Commission explored a broad swath of trade regulation rules in the 1970s, including proposing rules that 

regulated warranty terms and performance of mobile home manufacturers, required detailed disclosures in food 

advertisements that discussed a product’s nutritional characteristics, required antacid advertising disclosures, 

mandated that over-the-counter drug advertising mirror the precise language on FDA-approved labels, and required 

free trial periods for purchased hearing aids. The FTC also proposed rules based on public policy arguments, to ban 

all advertising directed to children. Id. at 3, 12-15.
16 

rulemaking efforts.78F

79 That is, legislative history shows that Congress rejected an open-ended 

interpretation of “unfair” in the Commission’s consumer protection enforcement efforts. 

Congress not only retaliated against the FTC broadly, it codified a more limited 

interpretation of “unfair” for consumer protection matters. Congressional condemnation of the 

FTC’s overreaching rulemaking proposals of the 1970s led to the Commission’s 1980 Unfairness 

Policy Statement that clarified the reach of the unfairness theory in consumer protection matters. 

The Unfairness Policy Statement declared that “[u]njustified consumer injury is the primary 

focus of the FTC Act”79F

80 and developed a three-part test to determine whether a consumer injury 

is unfair.80F

81 A subsequent 1982 Commission letter to Senators Bob Packwood and Bob Kasten 

recommended codifying a definition of unfair practices and clarified that public policy was not 

an independent basis for a finding of unfairness.81F

82 The Commission emphasized that consumer 

injury is the proper focus for unfairness and that public policy served “as an important check on 

the overall reasonableness of the Commission’s action.”82F

83 The three-part analysis that requires 

clear consideration of consumer injury was codified into law in 1994, establishing a precise test 

with factors to weigh.83F

84 For consumer protection purposes, the unfairness test provides 

guardrails based on a quantitative cost-benefit analysis.84F

85

This history of unfairness for consumer protection issues provides context that is relevant 

for evaluating “unfair” methods of competition. First, Congress rejected an expansive 

interpretation of unfairness that relied on general public policy considerations. Second, the 

Commission explained that the term “unfair” has economic content and is focused on consumer 

79 J. Howard Beales, III, Director, Bureau of Consumer Protection., Fed. Trade Comm’n, The FTC’s Use of 

Unfairness Authority: Its Rise, Fall, and Resurrection (June 2003), available at https://www.ftc.gov/newsevents/news/speeches/ftcs-use-unfairness-authority-its-rise-fall-resurrection; Dissenting Statement of 

Commissioners Christine S. Wilson & Noah Joshua Phillips regarding the “Commission Statement on the Adoption 

of Revised Section 18 Rulemaking Procedures” (July 9, 2021), https://www.ftc.gov/system/files/documents/

public_statements/1591702/p210100_wilsonphillips_joint_statement_-_rules_of_practice.pdf 

80 FTC Policy Statement on Unfairness, Letter from Michael Pertschuk, Chairman, Fed. Trade Comm’n to Wendell 

H. Ford, Chairman, and John C. Danforth, Ranking Minority Member, S. Comm. on Commerce, Science, and 

Transp., Consumer Subcomm. (Dec. 17, 1980), reprinted in Int’l Harvester Co., 104 F.T.C. 949, 1070-76 (1984)

(typically referred to as the FTC’s Unfairness Statement). 

81 “It must be substantial; it must not be outweighed by countervailing benefits to consumers or competition that the 

practice produces; and it must be an injury that the consumers themselves could not reasonably have avoided.” Id. 

82 Letter from James C. Miller, Chairman, FTC to Bob Packwood, Chairman, Comm. on Commerce, Sci., and 

Trasnp., and Bob Kasten, Chairman, SubComm. On Consumer Comm. on Commerce, Sci., and Transp. (Mar. 5, 

1982), reprinted in Antitrust & Trade Reg. Rep. (BNA) No. 1055, at 568-70 (Mar. 11, 1982).

83 Id. at 8.

84 Federal Trade Commission Act Amendments of 1994, Pub. L. No. 103-312, 108 Stat. 1691 (1994), codified at 15 

U.S.C. § 45(n). 

85 Even with the unfairness test, this Commission is seeking to apply the standard in novel ways, ignoring the 

rigorous analytical framework. See Dissenting Statement of Commissioner Noah Joshua Phillips regarding FTC v. 

Passport Automotive Group, Inc. File No. 2023199 (Oct. 14, 2022) (rejecting the inclusion of an unfairness count to 

expand the FTC Act’s coverage to discrimination); Dissenting Statement of Commissioner Noah Joshua Phillips 

regarding the “Commercial Surveillance and Data Security Advance Notice of Proposed Rulemaking” (Aug. 11, 

2022) (discussing FTC overreach), https://www.ftc.gov/system/files/ftc_gov/pdf/

Commissioner%20Phillips%20Dissent%20to%20Commercial%20Surveillance%20ANPR%2008112022.pdf. 
17

injury, which Congress endorsed. Third, unfairness is based on quantitative cost-benefit analysis, 

requiring enforcement decisions to evaluate and balance both harms and benefits. Despite this 

history and accepted interpretation of the term “unfair” in the same statutory provision, today’s 

Policy Statement repudiates economic content for “unfair methods of competition,” rejects the

weighing and balancing of anticompetitive effects and procompetitive benefits, and adopts an 

expansive “I know it when I see it” approach that seeks to protect interests beyond those of 

consumers. In short, the Policy Statement takes a far different approach to unfairness in the 

competition context than it does for the antitrust arena.

C. The Policy Statement Fails to Provide a Framework for Credible 

Enforcement Decisions

The Policy Statement’s approach – invoking an adjective to establish liability – will lead 

to enforcement decisions that are not credible. Enforcement is credible when it yields results 

consistent with legal, economic, and societal norms. When outcomes conflict with established 

and accepted norms, or when government policy leads either to systematic underenforcement or 

overenforcement, public respect for antitrust enforcement is eroded.85F

86 Under the Policy 

Statement, the Commission may find liability merely by selecting an adjective and then limiting

the defenses of the respondent. Consequently, when the Commission brings a case under Section 

5, the cards are stacked so the Commission should always win. The Commission’s Part 3 

administrative adjudication process is already under attack as unfair to respondents. This Policy 

Statement will only add to the critique of the Commission’s processes. In addition, the Policy 

Statement instructs that the Commission’s determination regarding what practices constitute an 

unfair method of competition deserve judicial deference and “great weight” on appeal.86F

87 The 

framework embodied in the Policy Statement violates expectations of fairness, and consequently 

will undermine the credibility of antitrust enforcement.

D. The Policy Statement Fails to Consider the Full Legislative History 

Regarding Section 5 of the FTC Act

There is no dispute that Congress intended Section 5 of the FTC Act to reach beyond 

then-existing expectations about the scope of the Sherman Act.87F

88 There is also no dispute that 

Congress left it to the Commission to determine what conduct fell within the broader scope of 

“unfair methods of competition” rather than articulating a finite list of practices to be 

condemned.88F

89 It is similarly undisputed that Congress envisioned that Section 5 would address 

86 See Wilson, Klotz & Sandford, supra note 35, at 1452-53.

87 See Policy Statement at 7.

88 See, e.g., 51 Cong. Rec. 12,454 (1914) (Sen. Cummins) (“That is the only purpose of Section 5 – to make some 

things punishable, to prevent some things, that can not [sic] be punished or prevented under the antitrust law.”).

89 See S. Rep. No. 597, 63d Cong. 2d Sess., at 13 (1914) (“The committee gave careful consideration to the question 

as to whether it would attempt to define the many and variable unfair practices which prevail in commerce and to 

forbid [them] . . . or whether it would, by a general declaration condemning unfair practices, leave it to the 

commission to determine what practices were unfair. It concluded that the latter course would be better, for the 

reason . . . that there were too many unfair practices to define, and after writing 20 of them into law it would be quite 

possible to invent others.”).
18 

incipient conduct before its perpetrator could become a monopolist.89F

90 These uncontroversial 

facts from the legislative history, however, do not translate directly into the expansive 

enforcement policy the majority announces today. That more than 100 years have elapsed since 

these legislative statements were made and the FTC Act was enacted makes clear that today’s 

expansive Policy Statement is not the natural outcome of the legislative history. In addition, there 

is more to the legislative history than the undisputed principles recounted in the Policy 

Statement; taking into account that fuller history reveals that, for at least three reasons, Congress 

intended a different path for Section 5 than what is unveiled today. 

First, Congressional expectations in 1914 that the reach of the Sherman Act would be 

limited turned out to be inaccurate. As William Kovacic and Marc Winerman explain, “the 

Sherman Act proved to be a far more flexible tool for setting antitrust rules than Congress 

expected in the early 20th century.”90F

91 Today, “courts recognize the Sherman Act’s expanded 

reach, with extensive precedent developed through actions by the antitrust enforcement 

authorities, including the FTC, and private parties.”91F

92 In fact, the scope of the Sherman Act is 

still expanding; just two weeks ago, the Antitrust Division obtained a guilty plea arising from 

criminal prosecution of an invitation to collude under Section 2 of the Sherman Act.92F

93 Until this

guilty plea, invitations to collude had been prosecuted as stand-alone Section 5 violations.93F

94

Congressional statements from 1914 must be interpreted in light of the current application of the 

Sherman Act.

Second, a closer look reveals that Congress designed Section 5’s “unfair methods of 

competition” prohibition to have economic content. Among Senators debating the legislation, 

there was substantial discussion about the meaning of “unfair methods of competition,”94F

95 but no 

senator propounded the list of adjectives that the Policy Statement now identifies as 

characteristic of unfair methods of competition. All legislative history analyses must be taken 

with a grain of salt,95F

96 but there is evidence that the author of Section 5 believed that “unfair” had 

economic content, consistent with the consumer welfare standard and the rule of reason. 

90 See Policy Statement at 4-5.

91 William E. Kovacic & Marc Winerman, Competition Policy and the Application of Section 5 of the Federal Trade 

Commission Act, 76 Antitrust L. J. 929, 934 (2010) (“Several factors explain why Section 5 has played so small a 

role in the development of U.S. competition policy principles. Probably the most important is that the Sherman Act 

proved to be a far more flexible tool for setting antitrust rules than Congress expected in the early 20th century.”).

92 Maureen K. Ohlhausen, Commissioner, Fed. Trade Comm’n, Remarks on Section 5: Principles of Navigation 4 

(July 25, 2013), https://www.ftc.gov/sites/default/files/documents/public_statements/section-5-principlesnavigation/130725section5speech.pdf. 

93 United States v. Zito, CR22-113-BLG-SPW (D. Mont. Sept. 19, 2022, https://www.justice.gov/opa/pressrelease/file/1543701/download. 

94 See In Re Quality Trailer Products Corp., 115 F.T.C. 944 (1992) (consent); In re Valassis Communs., Dkt. C4160, 2006 FTC LEXIS 25 (2006) (consent); In re A.E. Clevite, 116 F.T.C. 389 (1993) (consent); In re YKK 

(USA), 108 F.T.C. 628 (1993) (consent); In re Precision Moulding Co., 122 F.T.C. 104 (1996) (consent); In re Stone 

Container Corp., 125 F.T.C. 853 (1998) (consent); In re U-Haul Int’l, Inc., File No. 081-0157, 6 (2010) (consent). 

95 See Gilbert Holland Montague, Unfair Methods of Competition, 25 Yale L.J. 20 (1915).

96 See INS v. Cardoza-Fonseca, 480 U.S. 421, 452–53 (1987) (Scalia, J., concurring) (“Judges interpret laws rather 

than reconstruct legislators’ intentions. Where the language of those laws is clear, we are not free to replace it with 

an unenacted legislative intent.”); Thompson v. Thompson, 484 U.S. 174, 191–92 (1988) (Scalia, J., concurring) 
19 

As Congress was considering legislation that would become the FTC and Clayton Acts, 

President Woodrow Wilson and Louis Brandeis asked a lawyer and one-time member of the 

Progressive Party, George Rublee, to serve as liaison between the White House and Congress.96F

97

Rublee determined that pending legislation that would create a federal trade commission should 

include a provision that would give the Commission enforcement authority and power to issue 

orders challenging unfair methods of competition.97F

98 A commission with enforcement authority 

diverged from the “sunshine agency” model that was contained in earlier versions of the 

legislation, and that was preferred by Wilson and Brandeis.98F

99 But at a White House meeting with 

President Wilson and Brandeis, Rublee persuaded them to endorse his approach.99F

100

In subsequent correspondence to President Wilson describing legislative developments, 

another contemporary of Brandeis reported that: 

[Representative Ray Stevens of New Hampshire] has introduced the bill which 

was really drawn up by Mr. Rublee . . . The Stevens Bill declares unfair 

competition to be unlawful, and empowers the Commission, whenever it has 

reason to believe that a corporation is using any unfair method of competition, to 

hold a hearing, and if it is of [the] opinion that the method of competition in 

question is unfair to restrain the use thereof by injunction.100F

101 

In a memo prepared for President Wilson, Rublee – the author of the “unfair method of 

competition” prohibition101F

102 – explained the difference between fair competition and unfair 

competition. “Fair competition is competition which is successful through superior efficiency. 

Competition is unfair when it resorts to methods which shut out competitors who, by reason of 

their efficiency, might otherwise be able to continue in business and prosper.”102F

103 

A similar description of unfair competition – focused on efficiency among rival 

companies – was provided by key senators during debate. Senator Henry F. Hollis “who in the 

(“Committee reports, floor speeches, and even colloquies between Congressmen, are frail substitutes for bicameral 

vote upon the text of a law and its presentment to the President.”). 

97 See THOMAS K. MCCRAW, PROPHETS OF REGULATION: CHARLES FRANCIS ADAMS, LOUIS D. BRANDEIS, JAMES M.

LANDIS, ALFRED E. KAHN, location 1625 of 5271 on Kindle (1984); see also William Kolasky, The FTC’s Recission 

of Its 2015 Policy Statement on Section 5: If Not Consumer Welfare and the Rule of Reason, What?, Washington 

Legal Foundation Critical Legal Issues Working Paper Series 112 at 28-35 (July 2021), 

https://www.wlf.org/2021/07/26/publishing/the-ftcs-rescission-of-its-2015-policy-statement-on-section-5-if-notconsumer-welfare-and-the-rule-of-reason-what/. 

98 Kolasky, supra note 97, at 11-12.

99 McCraw, supra note 97, at Location 1633 of 5271.

100 Id. at Location 1650 of 5271. 

101 Id. at Location 1640 of 5271.

102 Kolasky, supra note 97, at 13.

103 George Rublee, Memorandum Concerning Section 5 of the Bill to Create a Federal Trade Commission 3 (July 

10, 1914) (unpublished memorandum), https://www.wlf.org/wp-content/uploads/2021/07/Rublee-1914-Memo-toLobby-for-the-Passage-of-Section-5.pdf. 
20

later stages of the debate upon the floor of the Senate was one of the chief sponsors for the 

provision regarding ‘unfair competition’”,103F

104 repeated the language of the Rublee memo.104F105 In 

short, for the author of Section 5 and one of its chief sponsors, unfair competition has economic 

content; unfair competition is defined by efficiency, not the list of adjectives provided in the 

Policy Statement.

Third, the legislative history explains that unfair competition must adversely affect 

consumers, not merely weaker rivals. That is, the legislative history does not support abandoning 

the consumer welfare standard. Senator Cummins explained that Section 5 is concerned “not 

merely with unfairness to the rival or competitor” but instead requires a finding that “the 

unfairness must be tinctured with unfairness to the public.”105F

106

Moreover, it is worth noting that Congressional activity regarding Section 5 of the FTC 

Act did not end in 1914 when the statute originally was enacted. As previously described, in 

1938, Congress amended Section 5 to add the prohibition of “unfair and deceptive acts and 

practices.” When the FTC pursued an expansive use of Section 5 through unfairness rulemaking 

in the 1970s, Congress expressed its disapproval by shutting down the agency for several days, 

failing to reauthorize the agency for fourteen years, and imposing additional procedural obstacles 

on trade regulation rulemaking for the FTC.106F

107 And in 1994, Congress made clear that there is 

economic content to Section 5’s use of the term “unfair” for consumer protection issues, when 

Congress codified the Commission’s Unfairness Statement that is based on a quantitative costbenefit analysis.

The full history of Section 5 that was omitted from the Policy Statement – the intended 

meaning of “unfair methods of competition” described by George Rublee and Senator Hollis in 

1914 and Congressional action on Section 5 in the 1980s and 1990s – demonstrates that 

Congress did not envision the approach to “unfair methods of competition” that is described in 

today’s Policy Statement.

IV. Conclusion

For the foregoing reasons, I do not support the approach that the Policy Statement 

describes for enforcement pursuant to Section 5’s “unfair methods of competition” authority. 

Consequently, I dissent. 

104 Montague, supra note 95, at 28.

105 51 Cong. Rec. 12,146 (1914). (“Fair competition is competition which is successful through superior efficiency. 

Competition is unfair when it resorts to methods which shut out competitors who, by reason of their efficiency, 

might otherwise be able to continue in business and prosper.”).

106 51 Cong. Rec. 11,105 (1914) (Sen. Cummins).

107 See Beales, supra note 79.