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In brief

On November 10, 2022, following a 3-1 vote, the Federal Trade Commission (“FTC”) issued a policy statement expanding its interpretation of the scope of unfair methods of competition under section 5 of the Federal Trade Commission Act.1 Commissioner Christine S. Wilson voted against the policy statement and issued an unforgiving 20-page dissent, referring to the policy change as a “radical” departure from the agency’s recent enforcement efforts.2 Commissioner Wilson states that the policy “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.”

Section 5 of the FTC Act prohibits “unfair methods of competition,” which covers conduct that violates antitrust laws or Section 5 itself. It “empower[s]” the FTC to “prevent persons, partnerships, or corporations . . . from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.”3


The FTC has recently attempted to broaden its enforcement powers through various avenues. This policy statement is the latest iteration of those efforts. In the FTC’s own words, the statement establishes a “rigorous” enforcement policy of laws banning unfair methods of competition. The FTC stated that it plans to prosecute various areas of conduct, including “incipient violations” of antitrust laws and conduct that violates the “spirit” of antitrust laws.

Key takeaways

  • The FTC plans to prosecute and punish far more “unfair” conduct than it ever has before.
  • According to the FTC, Section 5 reaches beyond the Sherman and Clayton Acts to encompass various types of unfair conduct that tend to negatively affect competitive conditions.
  • New actionable conduct may include “incipient violation[s] of the antitrust laws,” such as acquisitions that have the “tendency to ripen” into actual violations; and conduct that violates the “spirit of antitrust laws,” such as conduct that in the aggregate “may tend to undermine competitive conditions,” and a series of acquisitions “that tend to bring about the harms that the antitrust laws were designed to prevent, but individually may not have violated the antitrust laws.”

Under the FTC’s new policy, even conduct that is not independently actionable, may be actionable in the aggregate, at the FTC’s discretion.

In depth

In July of 2021, the FTC rescinded its 2015 Statement of Enforcement Principles Regarding “Unfair Methods of Competition” under Section 5 of the FTC Act. On November 10, 2022, it issued a new statement, which “supersedes all prior FTC policy statements and advisory guidance on the scope and meaning of unfair methods of competition under Section 5 of the FTC Act.”

The statement explains the FTC’s view of the legislative history of Section 5. It states that Congress clearly intended for the FTC to be able to prosecute “unfair” conduct more broadly than what is allowed for under the Sherman and Clayton Acts. The FTC states that Congress intended for Section 5 of the FTC Act to extend beyond the reach of antitrust laws; Congress wanted to more generally protect society against oppressive anti-competitive conduct. As such, Congress wanted to give the FTC flexibility to adapt to changing circumstances over time. Essentially, the FTC’s position is that its authority extends not only to the letter of antitrust laws, but also the spirit.

The FTC goes on to explain, broadly, what is actionable as an “unfair method of competition.” First, the conduct must be a “method of competition,” meaning that it is conduct undertaken by an actor in the marketplace, which directly or indirectly implicates competition. Second, the method of competition must be “unfair.” Unfair conduct is that which “goes beyond competition on the merits.” The FTC explains that this means the conduct (1) is “coercive, exploitative, collusive, abusive, deceptive, predatory, or involve[s] the use of economic power of a similar nature;” and (2) “tend[s] to negatively affect competitive conditions.” These criteria are evaluated on a sliding scale—where the first is particularly clear, less is required of the second, as an example.

The policy statement identifies some areas of conduct the FTC views as actionable under Section 5. Conduct that satisfies the FTC’s definition of “unfair method of competition” will be analyzed under the “per se” standard, meaning the conduct is automatically considered illegal regardless of any procompetitive justifications.  Below are some excerpts of the FTC’s “non-exhaustive” list of conduct that violates Section 5.

  1. Conduct deemed to be an incipient violation of the antitrust laws. Incipient violations include conduct by respondents who have not gained full-fledged monopoly or market power, or by conduct that has the tendency to ripen into violations of the antitrust laws. Examples include:
    • mergers, acquisitions, or joint ventures that have the tendency to ripen into violations of the antitrust laws,
    • a series of mergers, acquisitions, or joint ventures that tend to bring about the harms that the antitrust laws were designed to prevent, but individually may not have violated the antitrust laws, and
    • loyalty rebates, tying, bundling, and exclusive dealing arrangements that have the tendency to ripen into violations of the antitrust laws by virtue of industry conditions and the respondent’s position within the industry.
  2. Conduct that violates the spirit of the antitrust laws. This includes conduct that tends to cause potential harm similar to an antitrust violation, but that may or may not be covered by the literal language of the antitrust laws or that may or may not fall into a “gap” in those laws. Examples of such violations include:
    • parallel exclusionary conduct that may cause aggregate harm,
    • conduct by a respondent that is undertaken with other acts and practices that cumulatively may tend to undermine competitive conditions in the market,
    • de facto tying, bundling, exclusive dealing, or loyalty rebates that use market power in one market to entrench that power or impede competition in the same or a related market,
    • a series of mergers or acquisitions that tend to bring about the harms that the antitrust laws were designed to prevent, but individually may not have violated the antitrust laws,
    • mergers or acquisitions of a potential or nascent competitor that may tend to lessen current or future competition,
    • using market power in one market to gain a competitive advantage in an adjacent market by, for example, utilizing technological incompatibilities to negatively impact competition in adjacent markets,
    • false or deceptive advertising or marketing that tends to create or maintain market power, or
    • discriminatory refusals to deal which tend to create or maintain market power.

According to the FTC, the statement was intended as a guide to the public, business community, and antitrust practitioners by laying out principles defining whether business practices constitute unfair methods of competition under Section 5 of the FTC Act. In reality, however, the statement merely advises the public that the FTC has interpreted Section 5 in a manner that expands the scope of its powers by punishing additional conduct. It does not offer much in the way of practical guidance.

The policy statement has already been widely criticized, including by Commissioner Wilson. In her dissenting statement, Commissioner Wilson points out some of the statement’s practical shortcomings.4 It does not (1) “provide clear guidance to businesses seeking to comply with the law,” (2) “provide a framework that will result in credible enforcement,” or (3) “address the legislative history [of Section 5] that . . . cautions against an expansive approach to enforcing Section 5.”5 Commissioner Wilson argues that the statement “announces that the Commission has the authority summarily to condemn essentially any business conduct it finds distasteful.”6 Chair Khan responded, calling Commissioner Wilson’s concerns “misplaced” because the FTC intends only to enforce the law, and because the policy statement “identifies the framework and factors the Commission will consider when determining whether a business practice constitutes an “unfair method of competition.”7

The U.S. Chamber of Commerce also critiqued the policy statement, referring to it as “a pure political power grab designed to give Chair Khan carte blanche control over when, where, and how companies compete.”8 The Chamber of Commerce went on to say that the “FTC’s decision to reject decades of bipartisan consensus and declare itself the nation’s economic czar will discourage healthy competition and damage America’s competitiveness.” Other organizations—Demand Progress, the American Economic Liberties Project, and the Open Markets Institute—have celebrated the FTC’s move, stating that the FTC will now be better equipped to combat anticompetitive practices.9

In sum, the FTC has further delineated what it perceives to be actionable conduct, as part of its efforts to prosecute any and all types of anticompetitive conduct. The scope of the FTC’s ability to secure judgments against companies under this new Section 5 policy will become clearer over time as companies challenge the FTC’s actions. In the meantime, companies should be particularly mindful of ways in which they can curb anticompetitive conduct and mitigate Section 5 liability, including by conducting antitrust compliance reviews or health checks. Companies can and should consult counsel before engaging in conduct that may fall under the FTC’s expanded interpretation of its enforcement powers. Please reach out to us if we can be of assistance in considering how the FTC’s Section 5 interpretation will affect your company’s antitrust policies and procedures.

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1 Fed. Trade Comm’n, Policy Statement regarding The Scope of Unfair Methods of Competition under Section 5 of The Federal Trade Commission Act (2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyStatement.pdf.
2 Comm’r Christine S. Wilson, dissenting statement regarding the “Policy statement regarding the scope of unfair methods of competition under Section 5 of The Federal Trade Commission Act” (2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyWilsonDissentStmt.pdf.
3 15 U.S.C. § 45.
4 Comm’r. Wilson, dissenting statement.
5 Id.
6 Id.
7 Chair Lina M. Khan, joined by Comm’rs Rebecca Kelly Slaughter & Alvaro M. Bedova, statement on the adoption of the statement of Enforcement Policy regarding Unfair Methods of Competition under Section 5 of the FTC Act (2022), https://www.ftc.gov/system/files/ftc_gov/pdf/Section5PolicyStmtKhanSlaughterBedoyaStmt.pdf.
8 Neil Bradley, Federal Trade Commission’s Section 5 Guidance Will Discourage Competition and Damage America’s Competitiveness, U.S. Chamber of Com. (Nov. 10, 2022), https://www.uschamber.com/finance/antitrust/federal-trade-commissions-section-5-guidance-will-discourage-competition-and-damage-americas-competitiveness.
9 See, e.g., Press Release, American Economic Liberties Project, FTC Charges Path Forward to Combat Anticompetitive Behavior Across Markets (Nov. 10, 2022), https://www.economicliberties.us/press-release/ftc-charges-path-forward-to-combat-anticompetitive-behavior-across-markets/; Press Release, Open Markets, Open Markets Applauds the FTC’s New Landmark Policy Statement on Policing Unfair Methods of Competition Policy (Nov. 10, 2022), https://www.openmarketsinstitute.org/publications/open-markets-applauds-the-ftcs-new-landmark-policy-statement-on-policing-unfair-methods-of-competition-policy.

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William Roppolo is the Head of Litigation and Government Enforcement for Baker McKenzie's New York and Miami offices, and serves as Chair of the North America Trial Team. He is also Lead Partner of the Miami office. William has successfully tried commercial and criminal cases throughout the United States, including matters involving alleged antitrust, fraud and money laundering violations. He began his legal career investigating financial crimes with the United States Customs Service. William is a former president of the Federal Bar Association's South Florida chapter and was recently appointed to the national Federal Bar Association's Professional Ethics Committee. He has published many articles on topics ranging from anti-corruption to successor liability.

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Mark H. Hamer is Global Chair of the Firm's Antitrust & Competition Practice Group, comprised of over 300 competition lawyers in over 60 offices across 43 countries. Mark has over 25 years of wide-ranging litigation experience, including first-chair roles in jury trials, bench trials and arbitrations. His primary focus is antitrust litigation. Before joining Baker McKenzie, Mark was a successful trial attorney in the Antitrust Division of the US Department of Justice. He was involved in some of the DOJ's highest-profile antitrust trials. Before joining the DOJ, Mark was a partner at another global law firm where he handled complex multidistrict antitrust class actions in courts across the nation.

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Creighton Macy is the Chair of Baker McKenzie's North America Antitrust & Competition Practice Group. Creighton is recognized as a leading global antitrust practitioner.

Creighton has extensive experience representing clients in a wide variety of antitrust matters, including mergers and acquisitions, investigations by the United States Department of Justice and the Federal Trade Commission, private litigation, and counselling on issues such as antitrust compliance. Before joining the Firm, Creighton served as Chief of Staff and Senior Counsel in the DOJ Antitrust Division, working as a senior advisor to the Assistant Attorney General on civil and criminal antitrust enforcement and policy matters, as well as budget and personnel issues. During Creighton's time at the DOJ, the Antitrust Division undertook an unprecedented volume of high-profile civil and criminal matters.

Creighton began his career as a Trial Attorney in the Litigation III and Transportation, Energy, and Agriculture sections of the Antitrust Division, working on a number of notable merger and civil non-merger investigations and cases. Before rejoining the Antitrust Division as its Chief of Staff, he was a member of another global law firm's antitrust practice, where he advised clients on a wide range of US and international antitrust issues.

Creighton is consistently recognized globally for his market-leading antitrust practice with respect to high-stakes transactions, investigations, and compliance and counseling work. For example, clients have noted that Creighton “shines above the rest’ due to his first-rate cartel and merger control-related practice.’” He also regularly speaks and publishes articles relating to a variety of antitrust issues, and has been recognized many times for his contributions and thought-leadership on these issues.

Creighton is currently Co-Chair of the American Bar Association Antitrust Law Section’s Young Lawyers Task Force. In previous roles, he served as Reporter of the Presidential Transition Task Force, as well as Chair of the Trade, Sports, and Professional Associations Committee. He is highly involved in mentoring programs, including with the Antitrust Law Section, as well as Marquette University Law School, where he previously served as the DC Representative of the Alumni Board.

Creighton graduated from Marquette University, where he was an NCAA Division I Academic All-American tennis player. During his time at Marquette, he was awarded the Athletic Department’s Cura Personalis award by his peers, as well as several leadership awards. More recently, Creighton was named the Athletic Department’s Young Alumnus of the Year Award.

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Jeff Martino brings an in-depth understanding of a wide variety of white collar and fraud related matters to his antitrust litigation and investigations practice. Jeff is co-lead of the Firm's Global Cartel Task Force and represents multinational corporations and their boards and executives in high-stakes criminal and civil investigations by the US Department of Justice (DOJ) and other federal and state agencies Prior to joining Baker McKenzie, Jeff spent nearly two decades at the DOJ and his last 7 years as a senior leader in two different DOJ components. He has extensive experience as “first chair” on trials and investigations in the most complex areas of criminal antitrust. Jeff's work at the DOJ included providing technical assistance to competition agencies in Asia, Africa, the Americas and Europe and overseeing matters that included international corruption and antitrust cartel offenses that entangled the largest global banks and their key executives.

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Nandu Machiraju is a counsel in Baker McKenzie's North America Antitrust & Competition Practice Group. He has significant industry experience in antitrust matters affecting the healthcare, pharmaceuticals, chemicals, mining, and technology sectors. Nandu advises clients on a wide range of antitrust matters and has considerable experience counseling clients in government investigations, proposed mergers and acquisitions, conduct matters, compliance, and litigation. Before joining the Firm, Nandu worked as an attorney with the US Federal Trade Commission (FTC). Most recently, Nandu was an attorney in the Bureau of Competition’s Litigation Group where he served a critical role on merger litigation challenges in the hospital and medical-device industries. Before that, he served as an Attorney Advisor to FTC Chairman Joseph J. Simons where he advised on enforcement, appellate advocacy, policy, and congressional relations as well as matters relating to agency management. Nandu also was an attorney in the Mergers I Division where he worked on mergers involving pharmaceuticals, medical devices, retail pharmacies, and cement plants. Before joining the FTC, Nandu was an associate at an international law firm where he practiced antitrust and competition law in that firm’s Washington, D.C. and Brussels offices.

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Ashley Eickhof is a senior associate in the Firm's North America Antitrust & Competition Practice Group. Ashley is an experienced litigator and has tried criminal cases in federal court.
Prior to joining Baker McKenzie, Ashley worked at another large international law firm in the Antitrust and Competition Practice Group. Before that, Ashley began her career as a federal prosecutor for the Antitrust Division of the US Department of Justice.

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Annasofia Roig is an associate in Baker McKenzie's Miami office. Prior to joining the Firm, she clerked for the Honorable Adalberto Jordan of the Eleventh Circuit Court of Appeals and the Honorable Monica Gordo of the Third District Court of Appeal. Annasofia regularly lectures at the University of Miami School of Law and coaches the Trial Advocacy Team at Florida International University College of Law. While in law school, she interned for the Honorable Rudolph Contreras of the U.S. District Court for the District of Columbia and the U.S. Attorney’s Office for the Southern District of Florida. She also served as the President of the Trial Advocacy Team and as the Executive Managing Editor for the FIU Law Review.

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