FTC Section 5 Policy Statement Effectively Declares Competition Illegal

The US economy and consumers benefit from healthy competition. in a new policy statement defining methods of unfair competition, however, the FTC is actually determined to declare it illegal for companies to compete in a way that helps consumers. This statement, both breathtaking in its scope and extreme in its approach, will discourage healthy competition, hurt US competitiveness, and contribute to higher inflation. Congress and the courts must rein in the FTC’s overreach.

Why is this important:
The FTC has effectively declared pro-consumer competition illegal. In the FTC’s view, the agency may consider any business conduct to be “unfair” without any evidence of consumer harm, anticompetitive intent, market power, or market definition. As Dissenting Commissioner Christine Wilson Explain, “The policy statement takes an ‘I know it when I see it’ approach based on a list of nefarious-sounding adjectives, many of which have no antitrust or economic significance.” That leaves the FTC with carte blanche control over the economy, allowing him to decide on a whim whatever he deems unfair.

Go further:
The FTC seeks to prohibit a host of common business practices that have long been considered on a bipartisan basis to be good for competition, good for consumers, good for lowering prices, and good for a vibrant and healthy economy. In addition, the FTC now wants to suggest that it has the power to review mergers in a way that Congress and the courts have explicitly disallowed 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 impractical for President Khan and her agenda to measure business practices against consumer harm. Khan has convinced his fellow Democratic commissioners that the solution is to ignore consumer harm and that fiat-label business practices are a violation of the law whenever they feel like it.

The bottom line:
The FTC has asserted itself as an unprecedented authority to micromanage the American economy, unrelated to history, law, or basic economics. Congress, the courts, and the broader business community must resist the agency’s massive reach. If the FTC is allowed to implement this policy statement, consumers should expect higher prices, less choice, and less innovation. Such deep government intervention in our economy would have catastrophic consequences for free enterprise.

About the authors

Sean Heather

Senior Vice President, International Regulatory Affairs and Antitrust, U.S. Chamber of Commerce

Sean Heather is senior vice president of international regulatory and antitrust affairs.

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About Myra R.

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