James Cooper on a Sensible Limit to the FTC’s Section 5 Authority
In this posting, I sketch out a sensible limitation to the FTC’s Section 5 authority. This domain should be narrow, focusing only on harmful conduct that but for the application of Section 5 would remain un-remedied.
As a threshold matter, the FTC explicitly should renounce its reliance on early Section 5 case law like S&H and Brown Shoe and write from a clean slate. No serious antitrust enforcer today would consider challenging the conduct at issue in these cases, yet, in each of its recent standard-setting cases, the Commission dutifully invokes the language in S&H and Brown Shoe like a sacred talisman that will conjure the authority to act beyond the “letter and spirit of the antitrust laws.” This dicta, however, comes from seriously outmoded cases. For example, S&H upheld the Commission’s challenge to the practice of preventing unauthorized green-stamp exchanges, and cited approvingly a Section 5 decision from 1934 that condemned the practice of selling penny candy to children in “break and take” packs, because “it tempted children to gamble and compelled those who would successful compete with Keppel to abandon their scruples by similarly tempting children.”