The FTC Will Be the Judge

As the father of a 10-year-old, I hear plenty about unfairness. Sometimes, my daughter is playing my tune. To her credit, she notices and objects when people, whether friends or people she hears about in the news, suffer real injustice. So when she says that it's unfair that someone was treated badly, she and I are working from the same page. Other times, though, what she calls unfairness involves just a disappointing outcome. It could be a tough loss for a team that tried hard, or it could be her bedtime. At that point, her notion of unfairness and mine diverge; what's too bad may not really be unfair, at least not to me. She may be right sometimes--though not about bedtime--but the point is that unfairness is in the eye of the beholder. And even the same eye may see things differently at different times. I doubt that I'm as consistent as I'd like to think.

But this column's on antitrust law, not child-rearing. And the antitrust news here is that businesses that every once in awhile disappoint their customers or, heaven forbid, their competitors, are now facing antitrust liability for "unfair" conduct. Until recently, the Federal Trade Commission's antitrust cases alleged "unfair methods of competition" in violation of FTC Act Section 5 based on violations of Section 1 or Section 2 of the Sherman Act--conduct was "unfair" because it was an agreement in unreasonable restraint of trade or monopolization. That meant that the FTC's antitrust suits were subject to the same rules that applied to suits brought by the Justice Department or private plaintiffs--in particular, the need to show anti-competitive effects (other than in per se cases). But there's always been the potential for the FTC to bring Section 5 suits untethered to the Sherman Act; the Supreme Court has said clearly (if not recently) that Section 5 reaches further than the Sherman Act. So the FTC could always allege that conduct is "unfair" not because it violates the Sherman Act but because it's simply unfair. In fact, one of the D.C. Circuit judges who handed the FTC a stinging loss in Rambus paused during the oral argument to ask why FTC hadn't done just that.

Chris Kelly

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