Competition policy and the application of section 5 of the federal trade commission act

Antitrust Law Journal

Volumn 76, Issue 3, 2010, Pages 929-950

  Kovacic, William E ^a   Winerman, Marc ^b  

^a GEORGE WASHINGTON UNIVERSITY   (United States)

^b NONE

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EID: 77955647596     PISSN: 00036056     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (117)

1. 15 U.S.C. § 2.
2. These trends are examined in ANDREW I. GAVIL ET AL., ANTITRUST LAW IN PERSPECTIVE: CASES, CONCEPTS AND PROBLEMS IN COMPETITION POLICY 582-762 (2d ed. 2008).
3. William E. Kovacic & Carl Shapiro, Antitrust Policy: A Century of Economic and Legal Thinking, 14 J. ECON. PERSP., Winter 2000, at 43, 54-58. For Supreme Court decisions in this decade that have relaxed restrictions on dominant firm conduct, see Pac. Bell Tel. Co. v. linkLine Commc'ns, Inc., 129 S. Ct. 1109 (2009), Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 549 U.S. 312 (2007); and Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004).
4. 15 U.S.C. § 45.
5. See Neil W. Averitt, The Meaning of "Unfair Methods of Competition" in Section 5 of the Federal Trade Commission Act, 21 B.C. L. REV. 227, 239-40 (1980) (discussing Supreme Court's interpretation of Section 5 and its endorsement of the capacity of Section 5 to reach beyond boundaries of other federal antitrust statutes).
6. See, e.g., Thomas A. Miller & Ryan W. Marth, Promoting Greater Consistency in Single Party Conduct: Is Section 5 of the FTC Act a "Third Way" to Converge European and U.S. Interests? (June 18, 2009) (unpublished paper presented at the American Antitrust Institute's 10th Annual Conference) (discussing how application of Section 5 might permit development of more intervention-oriented policies), available at http://www.anti trustinstitute.org/archives/files/Marth%20Miller%20Convergence%20Article- 07142009 1600.pdf.
7. Albert A. Foer, Section 5 as a Bridge Toward Convergence, Presentation at the FTC Workshop on Section 5 of the FTC Act as a Competition Statute (Oct. 17, 2008), available at http://www.ftc.gov/bc/workshops/section5/docs/afoer.pdf.
8. The FTC's creation and the role of Section 5 in its establishment are examined in Marc Winerman, The Origins of the FTC: Concentration, Cooperation, Control, and Competition, 71 ANTITRUST L.J. 1, 58-92 (2003).
9. The Clayton Act became law less than three weeks after the FTC Act in 1914.
10. Id. at 92.
11. JAMES M. LANDIS, THE ADMINISTRATIVE PROCESS 32-34 (1938) (observing that "there was widespread distrust of the courts' ability to evolve workable concepts to direct the economic forces" that had created competition policy problems and stating that this "distrust based itself upon the belief that the men who composed our judiciary too often held economic and social opinions opposed to the ideals of their time").
12. Averitt, supra note 4, at 233-34.
13. See REPORT OF THE SENATE COMM. ON INTERSTATE COMMERCE, S. REP. NO. 63-597, at 9 (1914), reprinted in 5 THE LEGISLATIVE HISTORY OF THE FEDERAL ANTITRUST LAWS AND RELATED STATUTES, PART I (Earl W. Kintner ed., 1982) [hereinafter KINTNER] ("The proper enforcement of the Sherman law also requires vigilant supervision which is most effectively obtained by a body in continual touch with the business organizations in the various industries.").
14. id. at 13 (explaining the rationale for enacting "a general declaration condemning unfair practices" and authorizing an administrative commission "to determine what practices were unfair").
15. 51 CONG REC. 11,083 (1914) (Senator Newlands observing that Commission would be composed of eminent lawyers and economists, experienced businessmen, and publicists).
16. id. at 11,090 (Senator Newlands observing that, if twenty improper practices were specified today, more would be developed tomorrow.).
17. REPORT OF THE SENATE COMM. ON INTERSTATE COMMERCE, S. REP. No. 63-597, at 10 (KINTNER, supra note 9, at 8-9) (explaining the need for a body with the "information, experience, and careful study of the business and economic conditions of the industry affected").
18. See ABA ANTITRUST SECTION, 1 MONOGRAPH No. 5, THE FTC AS AN ANTITRUST ENFORCEMENT AGENCY: THE ROLE OF SECTION 5 IN THE FTC ACT IN ANTITRUST LAW 20-25 (1981) (discussing institutional aims that led Congress to establish the FTC). Senator Albert Cummins, one of the leading advocates for the creation of the FTC, said, "If we find that the people are betrayed either through dishonesty or through mistaken opinion, the commission is always subordinate to Congress ⋯. Congress can always destroy the commission; it can repeal the law which creates it ⋯." 51 CONG. REC. 13,047-48 (1914).
19. Until 1938, the only remedy available to the Commission for a violation of an agency order was to seek a separate enforcement order from a court of appeals. FTC Act, Pub. L. No. 63-204, § 5, 38 Stat. 717, 719-721 (1914).
20. The Commission obtained the authority to seek civil penalties for Section 5 order violations in 1938. Wheeler-Lea Act, Pub. L. No. 75-447, § 3, 52 Stat. 111, 114 (1938), amending FTC Act § 5, 52 Stat. 111, 114.
21. This was the expectation of some of the FTC Act's principal sponsors. Shortly before Congress passed the legislation in 1914, Senator Cummins predicted that the FTC "will be found to be the most efficient protection to the people of the United States that Congress has ever given the people by way of a regulation of commerce." 51 CONG. REC. 14,770 (1914).
22. Senator Francis Newlands, one of the FTC Act's chief sponsors, noted during the legislative debates in 1914 that "as a result of investigation and as the result of long experience [the FTC] will build up a body of information and of administrative law that will be of service not only to [it] but to the country itself, and that gradually standards will be established that will be accepted and will constitute our code of business morals." 51 CONG. REC. 11,083 (1914).
23. The legislative history contains mixed indications of whether Congress intended Section 5 UMC to reach conduct within the letter of the Sherman Act at all. See Averitt, supra note 4, at 238 (noting that application of antitrust laws to conduct that could have been successfully challenged under the Sherman Act finds less support in the legislative history than do most other types of Section 5 violations). The Commerce Committee's initial report highlighted that the Commission would not interfere with Justice Department enforcement of the Sherman Act. S. REP. No. 63-597, supra note 10, at 10 (Commission would have power "ancillary to the Department of Jusdce to aid materially and practically in the enforcement of the Sherman law ⋯"). Senator Cummins anticipated that the Commission would refer Sherman Act cases to the Department 51 CONG. REC. 11,529 (1914). Senator Henry Hollis, one of the principal proponents of Section 5, offered a different emphasis.
24. See Winerman, supra note 6, at 79-80.
25. Hollis observed that the DOJ would be able to focus on "the great task of prosecuting suits for the dissolution of monopolies, leaving to the trade commission the important service of policing competition, so as to protect small business men, keep an open field for new enterprise, and prevent the development of trusts." 51 CONG. REC. 12,146. George Rublee, one of the original Commissioners and a key player in persuading Woodrow Wilson to endorse Section 5, believed that Section 5 had at most limited overlap with the Sherman Act; it reached "acts of competition," but not "agreements or combinations, prohibited by the Sherman Act, which limit or put an end to competition between the parties." George Rublee, Book Review, 38 HARV. L. REV. 269, 269 (1924) ("reviewing GERARD C. HENDERSON, THE FEDERAL TRADE COMMISSION (1924)).
26. In any event, the Commission was soon bringing administrative cases that could have been brought under the Sherman Act By 1922, in finding a Section 5 violation in a resale price maintenance case, the Supreme Court highlighted that the challenged conduct "goes far beyond" what the Sherman Act would allow; the Court then modified the Commission's order in ways that seemed intended to hew more closely to Sherman Act. FTC v. Beech-Nut Packing Co., 257 U.S. 441, 453-54 (1922).
27. Perhaps the least used provision of the FTC Act is Section 7, which authorizes the Commission to serve as a special master to assist the court in formulating remedies in complex cases. 15 U.S.C. § 47.
28. FTC v. Eastman Kodak Co., 274 U.S. 619 (1927). In the 1950s and 1960s, the Supreme Court did take a number of Commission cases involving the conduct of a respondent towards its merchandisers. In the last case to reach the Supreme Court, FTC v. Texaco, Inc., 393 U.S. 223 (1968), Texaco had entered into contracts with manufacturers of tires, batteries, and accessories pursuant to which Texaco received commissions and by virtue of which Texaco pressed its dealers to sell those manufacturers' products. In its decision, the Court emphasized that Texaco "holds dominant economic power over its dealers."
29. Id. at 226. The Court endorsed the FTC's decision to use Section 5 to condemn Texaco's efforts to induce its dealers to purchase specified brands of tires, batteries, and accessories.
30. Id. at 231.
31. Since 1914, courts of appeals have issued decisions involving dominant firm conduct challenged under Section 5 of the FTC Act, but these have been rare. See, e.g., E.I. du Pont de Nemours & Co. v. FTC, 729 F.2d 128 (2d Cir. 1984).
32. Boise Cascade Corp. v. FTC, 637 F.2d 573 (9th Cir. 1980); Official Airline Guides v. FTC, 630 F.2d 920 (2d Cir. 1980).
33. Our own list of adjudicated matters in which the Commission relied on Section 5, prevailed, and achieved important doctrinal or economic results would be led by FTC v. Cement Institute, 333 U.S. 683 (1948) (upholding FTC challenge, predicated upon Section 1 of the Sherman Act and Section 5 of the FTC Act, to base-point pricing scheme)-if not for the subsequent fate of that case.
34. See infra text accompanying note 66.
35. 148 F.2d 416 (2d Cir. 1945).
36. More than any other case from the 1970s, Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263 (2d Cir. 1979), marked a rethinking of more expansive enforcement approaches that Alcoa had set in motion in the 1940s.
37. See ERNEST GELLHORN, WILLIAM E. KOVACIC & STEPHEN CALKINS, ANTITRUST LAW AND ECONOMICS IN A NUTSHEIX 153-54 (5th ed. 2004) (discussing significance of Berkey Photo).
38. 328 U.S. 781 (1946).
39. 334 U.S. 100 (1948).
40. 110 F. Supp. 295 (D. Mass. 1953), offd per curiam, 347 U.S. 521 (1954).
41. See, e.g., Eugene Rostow, The New Sherman Act: A Positive Instrument of Progress, 14 U. CHI. L. REV. 567, 577 (1947) (Alcoa and American Tobacco "mark the new birth of Section 2.").
42. Edward H. Levi, The Antitrust Laws and Monopoly, 14 U. CHI. L. REV. 153, 183 (1947) ("Today & as a result of an increased awareness of the monopoly problem, and as a result of the Alcoa and American Tobacco decisions we appear to have a new interpretation of the [Sherman] Act, closer probably to its original intention, which can give the act strength against monopolies as such, and also against control by three, four or five corporations acting together.").
43. The most notable scholarly contribution supporting the application of no-fault theories of liability under Section 2 of the Sherman Act was 3 PHILLIP AREEDA & DONALD F. TURNER, ANTITRUST LAW ¶¶ 614-623 (1978). The history of post-World War II no-fault monopolization proposals is sketched in GAVIL ET AL., supra note 2, at 620-21.
44. 384 U.S. 316 (1966).
45. Brown Shoe Co., 62 F.T.C. 679, 715-27 (1963). The Commission also found that the challenged practice violated "the standards of illegality under Section 3 and Section 7 of the Clayton Act."
46. Id. at 717.
47. Brown Shoe Co. v. FTC, 339 F.2d 45, 55 (8th Cir. 1964).
48. Brown Shoe, 384 U.S. at 322. The court of appeals decision had been so damning of the Commission's analysis and scornful of its interpretation of Section 5 that the Supreme Court may have perceived that the very legitimacy of the agency's basic charter was at stake and consequently may have felt compelled to come to the FTC's defense.
49. 370 U.S. 294 (1962).
50. Brown Shoe, 62 F.T.C. at 716-17.
51. The Commission's decision observed: The structure of the industry is significant. Although there are a large number of shoe manufacturers, a few companies occupy a commanding position. Of the approximately 1,000 shoe manufacturers in 1959, the top 70 manufacturers accounted for approximately 54 percent of the shoe production in that year. The 5 largest manufacturers, it should be noted, produced 24 percent of total pairs of shoes produced in 1959 and their production further constituted 45 percent of the product manufactured by the top 70 manufacturers.
52. Id. at 717-18.
53. The Commission did not assign a specific market share to Brown Shoe. In the Brown Shoe merger decision, which examined structural conditions existing at the time of the exclusive dealing plan challenged in the FTC's case, the Supreme Court found that the combined shares of production of Brown Shoe and Kinney totaled 5 percent. Brown Shoe, 370 U.S. at 302-03.
54. The agency's decision stated: In assessing the need for Commission action ⋯ we must take account of the fact that historically one of the purposes of the antitrust laws, over and above purely economic considerations, has been to preserve "⋯ an organization of industry in small units which can effectively compete with each other⋯" To foster the competitive position of the smaller manufacturers, Brown should be prohibited from entering into arrangements with its customers interfering with the latter's independent judgment in making purchasing decisions.
55. Id. at 720 (citing United States v. Aluminum Co. of Am., 148 F.2d 416, 429 (2d Cir. 1945).
56. Brown Shoe Co. v. United States, 370 U.S. 294 (1962)).
57. 148 F.2d 416 (2d Cir. 1945).
58. 405 U.S. 233 (1972).
59. Id. at 239-44.
60. 333 U.S. 683 (1948).
61. Berkey Photo Inc. v. Eastman Kodak Co., 603 F.2d 263 (2d Cir. 1979).
62. See William E. Kovacic, The Intellectual DNA of Modem U.S. Competition Law for Dominant Firm Conduct: The Chicago/Harvard Double Helix, 2007 COLUM. BUS. L. REV. 1, 43-51 (discussing influence of modem scholarship on predatory pricing doctrine).
63. 386 U.S. 685 (1967).
64. Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 549 U.S. 312 (2007).
65. Kovacic, supra note 40, at 51-64.
66. Id.
67. See, e.g., NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 136-37 (1998) ("To apply the per se rule here ⋯ would transform cases involving business behavior that is improper for various reasons, say, cases involving nepotism or personal pique, into treble-damages antitrust cases.").
68. Phillip Areeda & Donald F. Turner, Predatory Pricing and Related Practices Under Section 2 of the Sherman Act, 88 HARV. L. REV. 697 (1975).
69. Id. at 699.
70. 410 U.S. 366 (1973).
71. See United States v. AT&T Corp., 552 F. Supp. 131 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001 (1983).
72. See William E. Kovacic, Accounting for Regulation in Determining the Application of Antitrust Rules to Firms Subject to Public Utility Oversight, 40 ANTITRUST BULL. 483, 496 (1995) (discussing how courts in antitrust cases regarded the effectiveness of public utility regulation).
73. Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004).
74. Credit Suisse Sec. (USA) LLC v. Billing, 551 U.S. 264 (2007).
75. Pac. Bell Tel. Co. v. linkLine Commc'ns, Inc., 129 S. Ct. 1109 (2009).
76. While it might ameliorate those concerns, however, it would not address the potential to incorporate Commission UMC law into the construction of state laws with their own UMC provisions. Many states have statutes, modeled on the FTC Act, that prohibit unfair methods of competition (as well as unfair or deceptive acts or practices). The federal and state systems do not operate in watertight compartments. As commentators have documented, the federal and state regimes are interdependent. See, e.g., DEE PRIDCEN & RICHARD M. ALDERMAN, CONSUMER PROTECTION AND THE LAW 143-52 (2009-2010 ed.) (discussing use of FTC precedent to interpret state consumer protection statutes).
77. Lawrence Fullerton et al., Reliance on FTC Consumer Protection Law Precedents in Other Legal Forums (ABA Section of Antitrust Law, Working Paper No. 1, July 1988) (describing how FTC consumer protection actions inform application of state law). State laws modeled on the FTC Act can include private causes of action, including private causes of action with multiple damages and attorneys' fees.
78. "The FTC's success in developing a unique Section 5 jurisprudence is only one measure of its success as a competition enforcement agency. Most UMC cases are expressly premised on an underlying Sherman Act theory. For those cases, a comparable inquiry would examine the extent to which the Commission has influenced broader antitnist doctrine. It would consider, for example, the impact of the Commission's analysis of how to conduct a rule of reason analysis, which was endorsed on judicial review, PolyGram Holdings, Inc. v. FTC, 416 F.3d 29 (D.C. Cir. 2005). and has influenced other courts. Further, a fuller analysis would consider the Commission's influence on policy and conduct through its research mission, consumer education, foreign and domestic advocacy, and other tools.
79. See generally WILLIAM E. KOVACIC, THE FEDERAL TRADE COMMISSION AT 100: INTO OUR 2ND CENTURY (2009) (report by FTC Chairman on the results of the FTC's self-study), available at http://www.ftc.gov/ftc/workshops/ftcl00/docs/ ftc100rpt.pdf.
80. In addition to the lack of a judicial screen, settling respondents may have less interest in the doctrine reflected in the complaint than in the limitations on conduct imposed by the order, while the Commission's priorities might be more weighted to the doctrinal implications. In particular, a respondent who is otherwise inclined to settle a case may have little incentive to resist an alternative theory of liability that leads to no additional order provisions.
81. See Negotiated Data Solutions LLC, FTC No. C-4234 (Sept. 22, 2008) (Decision and Order), available at http://www.ftc.gov/os/caselist/0510094/ 080923ndsdo.pdf.
82. But see Dissenting Statement of Commissioner William E. Kovacic, In re Negotiated Data Solutions LLC, FTC No. C-4234 (Sept. 22, 2008), available at http://www.ftc.gov/os/caselist/0510094/080122kovacic.pdf.
83. FTC v. Texaco, Inc., 393 U.S. 223 (1968); Atl. Refining Co. v. FTC, 381 U.S. 357 (1965).
84. FTC v. Brown Shoe Co., 384 U.S. 316 (1966).
85. Yamaha Motor Co. v. FTC, 657 F.2d 971, 981 (8th Cir. 1981).
86. Boise Cascade Corp. v. FTC, 637 F.2d 573 (9th Cir. 1980).
87. Official Airline Guides v. FTC, 630 F.2d 920 (2d Cir. 1980).
88. E.I. du Pont de Nemours & Co. v. FTC, 729 F.2d 128 (2d Cir. 1984) (Ethyl).
89. FTC v. Abbott Labs., 853 F. Supp. 526 (D.D.C. 1994). The Commission proceeded under Section 13(b) of the FTC Act, 15 U.S.C. 53(b), added in 1975, and sought a permanent injunction and disgorgement or restitution.
90. William E. Kovacic, Congress and the Federal Trade Commission, 57 ANTITRUST L.J. 869 (1989).
91. William E. Kovacic, The Federal Trade Commission and Congressional Oversight of Antitrust Enforcement, 17 TULSA L.J. 587, 625-27,666 (1982) [hereinafter Congressional Oversight of Antitrust Enforcement].
92. See Kovacic, Congressional Oversight of Antitrust Enforcement, supra note 65, at 625-27.
93. John Blair, who headed the FTC's Bureau of Economics in the early 1950s, wrote in 1964 that "[t]he agonies that the Commission went through in trying to justify its attack upon the basing-point system ⋯ left a scar which will long remain." John Blair, Planning for Competition, 64 COLUM. L. REV. 524, 525 (1964). Blair's prediction came to pass. To abate congressional outrage at the Cement Institute decision, the Commission forswore future efforts to address base-point pricing and similar arrangements except through the application of traditional Sherman Act concepts. These concessions came back to haunt the agency in 1979 in the Boise Cascade case, where the court of appeals cited the agency's representations to Congress soon after the Supreme Court issued its Cement Institute opinion as a factor weighing against the application of Section 5 to condemn the respondents' parallel, independent adoption of delivered pricing systems. Boise Cascade, 637 F.2d at 576.
94. Kovacic, Congressional Oversight of Antitrust Enforcement, supra note 65, at 630-67.
95. Others include its multi-member and bipartisan composition; its authority to conduct adjudicative hearings; its combination of investigatory, reporting, and litigation functions; and its combination of competition and consumer protection missions.
96. FTC Policy Statement on Unfairness (1980), appended to Final Order, Int'l Harvester Co., 104 F.T.C. 949, 1070 (1984), available at http://www.ftc.gov/ bcp/policystmt/adunfair.htm. The principal section of that text was characterized as a "Commission Statement of Policy on the Scope of the Consumer Unfairness Jurisdiction."
97. See, e.g., Circle Cilk Co., 1 F.T.C. 13 (1916).
98. See, e.g., S. REP. NO. 75-221 (1937) (UDAP authority would allow the Commission to protect the public, even when competitors are not entitled to protection because they engage in similar practices).
99. FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 241-43 (1972) (discussing FTC v. Raladam Co., 283 U.S. 643 (1931), with disapproval).
100. Id. at 242-43 (discussing FTC v. R.F. Keppel & Bro., Inc., 291 U.S. 304 (1934), with approval).
101. Id. at 247, 248.
102. In discussing unfairness (and clearly referring to UDAP and, perhaps, to UMC as well), SandH cited with approval the 1964 Statement of Basis and Purpose for the Commission's Cigarette Rule. That Statement identified three factors that could support a finding of unfairness: consumer injury, public policy, and whether a practice is unethical or un-scrupulous. Statement of Basis and Purpose, Unfair or Deceptive Advertising and Labeling of Cigarettes in Relation to the Health Hazards of Smoking, Statement of Basis and Purpose, 29 Fed. Reg. 8324, 8355 (1964).
103. The Commission's 1980 unfairness statement clarified that the unethical/unfairness test was not an independent basis for unfairness, focused on a more precisely defined injury test, and retained a public policy component while tethering it to injury (public policy could sometimes be the sole basis for finding injury). FTC Policy Statement on Unfairness (1980), supra note 58, at 1070. Further, when Congress codified the standard in 1994, it retained the injury test and a more limited public policy test, with the qualification that public policy "may not serve as a primary basis" for finding unfairness. 15 U.S.C. § 45(n).
104. See Brown Shoe Co. v. United States, 370 U.S. 294, 320 (1962). The Court's Brown Shoe decision used this phrase twice-once in a general discussion about the aims of Section 7 of the Clayton Act and again in a passage that ultimately endorsed the application of Section 7 to preserve a more egalitarian business environment even at the occasional cost of efficiencies that a challenged merger might produce. GELLHORN ET AL., supra note 21, at 45-47.
105. See Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977).
106. Into the 1970s, for example, deception cases often pled both UMC and UDAP violations. See, e.g., Creative Replacements, Inc., 88 F.T.C. 347 (1976) (Complaint) (hair replacement implant system).
107. Although some cases may implicate both, in our view UMC doctrine should no longer subsume all unfair or deceptive acts (as it did from 1914 to 1938), nor should UDAP doctrine subsume all unfair methods (although it could be argued that every well-conceived competition case satisfies the statutory standard for unfairness).
108. FTC Workshop on Section 5 of the FTC Act as a Competition Statute, supra note 5, at 73-80.
109. See supra note 54.
110. See, e.g., Pac. Bell Tel. Co. v. linkLine Commc'ns Inc., 129 S. Ct. 1109, 1120-22 (2009) (appropriateness of judicial administration of certain remedies); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007) (noting costs of allowing discovery to proceed in an antitrust case).
111. Verizon Commc'ns, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408, 414 (2004) (noting risk of false positives); Credit Suisse Sec. (USA) LLC v. Billing, 551 U.S. 264, 279-84 (2007) (noting, and finding particularly significant in a case involving the role of antitrust in the regulated securities industries, problems posed by non-expert and generalist judges, non-expert juries, and the risk of antitrust mistake).
112. See Thomas B. Leary, A Suggestion for the Revival of Section 5, ANTITRUST SOURCE, Feb. 2009, http://www.abanet.org/andtrust/at-source/09/02/Feb09-Leary2- 26f.pdf).
113. see also Susan B. Creighton & Thomas G. Krattenmaker, Appropriate Role(s)for Section 5, ANTITRUST SOURCE, Feb. 2009, available at http://www.abanet.org/antitrust/at-source/09/02/Feb09-Creighton2-26f.pdf.
114. To the extent that the institutional concern with Sherman Act enforcement derives from the fairness of imposing treble damages for violating a (perhaps unanticipated) business norm, the optimal result could be to make the conduct subject to treble damages only after the Commission had enunciated the relevant standard-presumably not before the Commission filed its complaint, and perhaps not before it issued a litigated order or even before that order was subject to judicial review. (Less common situations, such as an unappealed decision of an administrative law judge or a Commission decision for which respondents did not seek judicial review, would raise additional questions). Even if the optimal time to start damages could be identified, it would be hard for a court that found a violation in a later Section 2 case to limit damages appropriately.
115. An analogy would look to the way that (at least in theory) Section 7 of the Clayton Act, 15 U.S.C. 18, sets a threshold that reaches any transaction whose effects "may be substantially to lessen competition or to tend to create a monopoly."
116. In other words, these are cases where yes, the challenged conduct is anticompetitive, but no, it does not violate the law because of a doctrine that trumps antitrust concerns. Creighton & Krattenmaker, supra note 83.
117. To this end, we note that, to the extent an argument relies on the FTC's expertise (as opposed to the more limited consequences of a Section 5 violation), such an argument will be more persuasive when the Commission uses it to consider issues that draw on the Commission's core expertise in analyzing competition issues, rather than to require the Commission to balance competition concerns against values outside its core expertise in competition (or consumer protection) matters. Further, it is more persuasive when the Commission uses administrative litigation, or seeks a preliminary injunction in support of administrative litigation, than when it seeks a permanent injunction, since in the latter case the Commission is not functioning, and does not anticipate functioning, as an adjudicative decision maker.